Pakistan Establishes Crypto Investigation Unit to Combat Financial Crime

Pakistan's Federal Investigation Agency (FIA) has established a dedicated cryptocurrency investigation unit within its newly operational National Command and Control Centre (NC3). This unit is tasked with investigating money laundering and terrorism financing conducted through virtual currencies. The move signifies an enforcement arm to complement the regulatory efforts of the Pakistan Virtual Assets Regulatory Authority (PVARA), which handles the regulation of digital assets.

FIA Counter-Terrorism Wing Director Muhammad Athar Waheed stated that the unit would focus on the criminal use of crypto. He also encouraged other agencies, including the National Cyber Crime Investigation Agency and the Anti-Narcotics Force, to develop similar units to address crypto's involvement in cybercrime and the drug trade. New rules are reportedly being drafted to ensure inquiries are concluded within set timeframes.

The NC3 center aims to consolidate the FIA's financial crime-fighting tools onto a single platform, incorporating desks for anti-money laundering and virtual currency investigations, an Interpol coordination point, and units for open-source intelligence, cyber patrolling, and dark web investigations.

This development is part of Pakistan's aggressive push to formalize its cryptocurrency sector. The country has already lifted an eight-year ban on crypto banking, established PVARA, and is in the process of issuing licenses for crypto exchanges. Pakistan has also explored tokenizing state assets and has engaged with a Trump-linked venture to investigate the use of its USD1 stablecoin for cross-border payments.

However, the country's crypto ambitions have faced some challenges. In June, the Jamia Darul Uloom Karachi seminary issued a fatwa deeming cryptocurrency not to be 'wealth' under Islamic law, casting doubt on its use as a valid payment method. PVARA chairman Bilal bin Saqib has since sought to differentiate between speculative tokens and asset-backed instruments like fully reserved stablecoins and blockchain-recorded sukuk, suggesting Pakistan could lead in Shariah-compliant digital finance.