Crypto Ban Myths in Pakistan!
There is widespread confusion in Pakistan about whether cryptocurrency is “banned.” Much of this confusion stems from regulatory warnings, banking restrictions, and media headlines rather than from black-letter law. The reality is more nuanced: crypto is not expressly illegal in Pakistan, but it operates in a regulatory gray zone with clear limitations.
Myth 1: Cryptocurrency Is Completely Banned in Pakistan
Reality: There is no parliamentary law that criminalizes owning, holding, or trading cryptocurrencies. Pakistan has not passed legislation declaring crypto illegal. Individuals are not prosecuted merely for possessing digital assets.
Myth 2: Trading Crypto Is a Criminal Offense
Reality: Trading crypto per se is not a criminal offense. However, regulated financial institutions (banks and payment processors) are restricted from facilitating crypto transactions due to State Bank of Pakistan (SBP) directives. This creates a practical barrier, not a criminal prohibition.
Myth 3: SBP Has Declared Crypto Illegal
Reality: The SBP has issued cautionary circulars, warning banks and the public about risks such as money laundering, fraud, and volatility. These notices do not amount to a statutory ban. They restrict banks—not private individuals.
Myth 4: All Crypto Activity Is the Same Under Law
Reality: Pakistani law differentiates by activity, not technology:
- Holding crypto: Not illegal
- Peer-to-peer trading: Not expressly illegal
- Using crypto for illegal purposes (fraud, laundering): Illegal under existing criminal and AML laws
- Operating an exchange or investment scheme: High legal risk without licensing or approval
Myth 5: Pakistan Will Never Regulate Crypto
Reality: Regulatory engagement is ongoing. Discussions around AML/CFT compliance, FATF obligations, and digital asset frameworks indicate a move toward controlled regulation, not prohibition. Provincial initiatives and policy proposals further support this direction.
What Is Clearly Illegal
Regardless of crypto’s status, existing laws apply:
- Fraudulent investment schemes
- Ponzi or pyramid structures
- Money laundering and terror financing
- Misrepresentation and consumer deception
Crypto does not provide immunity from Pakistan Penal Code, FIA cybercrime laws, or AML statutes.
Key Takeaway
Pakistan has not banned cryptocurrency, but it has also not legalized or regulated it comprehensively. This gray area exposes users and businesses to compliance risks—especially when banking channels, cross-border transfers, or public offerings are involved. Anyone dealing in crypto at scale should seek professional legal advice to navigate regulatory exposure safely.
The information provided in this article is for general informational purposes only and does not constitute legal or financial advice.
Author & Crypto Consultant
Shahid Jamal Tubrazy (Crypto & Fintech Law Consultant)
Shahid Jamal Tubrazy, a certified top expert in Crypto Law from Duke University, is a leading authority in the cryptocurrency and blockchain space. As a seasoned Fintech lawyer, he offers a full spectrum of services, including licensing, legal guidance for ICOs, STOs, DeFi, and DAOs, as well as specialized expertise in crypto mediation, negotiation, and mergers and acquisitions. With a proven track record and published works on Blockchain Regulation and Cryptocurrency Laws, Shahid provides unparalleled insights into the complexities of the fintech world, ensuring compliance and strategic success. 🌐💼 #CryptoLaw #Fintech #Blockchain #LicenseServices #CryptoMediator #MergersAndAcquisitions #CryptoCompliance #FrozenAssetsrecovery.
EMAIL: shahidtubrazy@gmail.com
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