ISLAMABAD – Pakistan has prepared an initial draft of Virtual Asset Service Provider (VASP) regulations aimed at preventing illegal use of virtual assets, including money laundering, terrorism financing, and corruption. The move is part of the country’s compliance with Financial Action Task Force (FATF) requirements.
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According to the draft, suspicious transactions involving virtual assets will be strictly prohibited. Service providers will be required to immediately report any suspicious client activity, and failure to comply could lead to license cancellation, penalties, and potential disqualification of directors, sponsors, or shareholders.
The regulations allow authorities to act on recommendations from the Financial Monitoring Unit (FMU), and partnerships with Politically Exposed Persons (PEPs) will require prior approval from the Money Laundering Reporting Officer. Anti-money laundering (AML) and counter-terrorism financing (CTF) measures will be mandatory for all VASPs.
For every virtual asset transfer of more than Rs. 1 million, Virtual Asset Service Providers (VASPs) in Pakistan will be required to obtain, verify, and
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Virtual asset service providers must verify and authenticate client information before onboarding, and partnerships will not be allowed if customer due diligence is incomplete. Companies offering virtual asset services must be registered taxpayers with a documented history and appoint experienced reporting officers to oversee AML and CTF compliance.
The draft emphasizes that these rules are intended to strengthen Pakistan’s financial system and promote transparency in virtual asset transactions. Officials note that proper implementation will help prevent virtual assets from being misused for illegal activities while fostering a secure environment for legitimate operations.
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Industry experts say that aligning with global standards will boost investor confidence and encourage responsible growth of Pakistan’s virtual asset sector. The government is expected to finalize and implement the regulations soon, marking a significant step toward curbing financial crimes in the digital asset space.