Pakistan Sets September 5 Deadline for Crypto Platforms to Comply with New Regulations

Pakistan is transitioning from a largely unregulated crypto environment to a structured regulatory framework. The Pakistan Virtual Assets Regulatory Authority (PVARA) has opened a licensing portal as of August 22, 2023, requiring existing virtual asset service providers to submit applications for a No-Objection Certificate (NOC) by September 5, 2023.

Bilal Bin Saqib, Chairman of PVARA, emphasized that this new regulatory approach aims to protect consumers and integrate virtual assets into the formal economy. The regulations, finalized on August 21, 2023, cover ten distinct categories of virtual asset activities, including exchanges and custody services, each with tailored requirements.

Providers that fail to apply by the deadline will face mandatory cessation of operations, as continued unlicensed activity will be deemed a criminal offense. Licensed providers will be required to segregate client assets and obtain explicit consent before lending or staking customer funds.

In addition to existing operators, the licensing portal also welcomes applications from new entrants looking to establish themselves under the new framework. The PVARA has also introduced a regulatory sandbox for companies testing new products, although participation does not guarantee licensing.

The implications of these regulations will vary for customers depending on whether their platforms comply. Licensed firms must ensure that customer assets are safeguarded and accessible during any operational wind-down.