ISLAMABAD (Mudassar Ali Rana) - In compliance with Financial Action Task Force (FATF) requirements, Pakistan has prepared an initial draft of Virtual Asset Service Provider (VASP) regulations.
The initiative aims to prevent the use of virtual assets for illicit purposes, including money laundering, terrorism financing, and corruption.
According to the draft, suspicious transactions involving virtual assets will be strictly prohibited, and service providers will be required to immediately report any suspicious client activity. The draft also states that violations by VASPs could result in license cancellation, penalties, and potential disqualification of directors, sponsors, or shareholders.
The regulations provide that actions can be taken on Financial Monitoring Unit (FMU) recommendations, and partnerships with Politically Exposed Persons (PEPs) will require prior approval from the Money Laundering Reporting Officer.
Under the draft, anti-money laundering (AML) and counter-terrorism financing (CTF) measures will be mandatory. Virtual asset service providers must verify and authenticate client information, and partnerships will not be allowed if customer due diligence is incomplete.
Sources indicate that companies offering virtual asset services must be registered filers with a documented tax history and appoint experienced reporting officers to oversee AML and CTF compliance. The draft emphasizes that these regulations are designed to strengthen Pakistan’s financial system and ensure transparency in virtual asset transactions.
The initiative reflects the government’s commitment to aligning with global standards while fostering a secure environment for virtual asset operations in the country. Implementation of these rules is expected to significantly curb the misuse of virtual assets for illegal activities.