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Pakistan moves to name PVARA a money-laundering supervisor. Here is what that would let it do

The committee that runs Pakistan's anti-money-laundering policy has approved adding the crypto regulator to the list of AML supervisors in the Anti-Money Laundering Act. Once the government notifies it, PVARA gets the Act's powers to inspect, demand records and fine crypto firms over money-launderin

Ammar Khan

Ammar Khan

5 min read
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Photo by Syed Fahim Haider on Unsplash

Key takeaways

  • On 27 October the National Executive Committee (NEC) on AML-CFT, chaired by Finance Minister Muhammad Aurangzeb, approved adding the Pakistan Virtual Assets Regulatory Authority (PVARA) to Schedule IV of the Anti-Money Laundering Act, 2010.
  • Schedule IV is the Act's list of "AML/CFT regulatory authorities". It currently names the State Bank, the SECP, the FBR and a handful of other bodies. Section 6A gives every authority on it powers to license, inspect, compel information and impose penalties on the firms it oversees.
  • The same meeting approved new thresholds for Currency Transaction Reports. The Finance Division did not publish the figures. PVARA's rules already require crypto applicants to file these reports.
  • The decision came the day before the Financial Action Task Force's October plenary opened in Paris. In the FATF's July table, Pakistan's row showed no crypto inspections and no enforcement.

What the committee decided

The Finance Division's press release on the 19th NEC meeting (PR No. 713, 27 October) has three decisions in it.

The NEC "approved the proposed revision to the thresholds for Currency Transaction Reports (CTRs)". It added Section 28 of the Pakistan Maritime Zones Act, 2023, to Schedule I of the AML Act, the list of predicate offences whose proceeds can be laundered. And it "further approved the inclusion of the Pakistan Virtual Assets Regulatory Authority (PVARA) in Schedule IV of the AMLA."

The release says the committee stressed keeping the AML-CFT framework "responsive to evolving financial risks and emerging technologies". The Law Minister, the State Bank Governor and the SECP Chairman attended, as did the head of the AML-CFT Authority and officials from the Financial Monitoring Unit (FMU).

The release does not say when the change takes effect. The Act lists, among the regulators in Schedule IV, "any other such entity or regulatory authority as may be notified by the Federal Government". The committee's approval is the decision. The next step is a notification. We have not found one in the Gazette as of 29 October.

What Schedule IV is

Section 6A of the Anti-Money Laundering Act defines an "AML/CFT regulatory authority" as the regulators and self-regulatory bodies "specified in Schedule IV". The schedule was added in September 2020, during the amendments Pakistan passed on its way off the FATF grey list.

The regulators on it split the financial system between them. The State Bank covers firms it licenses. The SECP covers firms it licenses. The FBR covers real-estate agents, jewellers and some accountants. National Savings and Pakistan Post have their own boards. Professional bodies such as the Institute of Chartered Accountants and the Pakistan Bar Council supervise their members.

Crypto firms do not fit into any of those boxes. PVARA did not exist in 2020.

What the powers are

Section 6A(2) gives each authority on the list ten powers and functions over its "reporting entities", the firms that must report suspicious activity to the FMU. They include:

  • licensing or registering reporting entities, and imposing conditions on them;
  • issuing regulations, directions and guidelines on customer due diligence, record-keeping and the other duties in sections 7A to 7H;
  • "monitoring and supervising, including conducting inspections";
  • "compelling production of information" to check compliance;
  • imposing "sanctions, including monetary and administrative penalties", on a firm, "including its directors and senior management and officers";
  • keeping statistics of all this to report to the NEC.

Section 6B adds that the regulators on the list "shall co-operate with their foreign counterparts" and share information with them.

PVARA already has its own law. The Virtual Assets Act, 2026, and PVARA's licensing regulations (S.R.O. 1419(I)/2026) require firms to run customer due diligence and appoint a money-laundering reporting officer. Regulation 98 ties that duty to the AML Act as well as to PVARA's own Act. What the listing adds is that PVARA would enforce the AML Act itself, as the State Bank does for banks, rather than leaving the AML Act's supervisory role unassigned for crypto firms.

Where crypto firms already sit in the AML system

Crypto firms are already inside the AML reporting system. Only their supervisor under the AML Act was missing.

PVARA's 2025 rules for no-objection certificates (NOCs), which applied until the new regulations replaced them on 21 August, treated an NOC as approval for a firm's "AML Registration on the goAML portal", the FMU's reporting system. They classed broker-dealer, custody, exchange and crypto-derivative services as "designated non-financial businesses and professions", a category of reporting entity under the AML Act. They also required currency transaction reports "for all fiat-based transactions that meet or exceed the applicable threshold".

The 2026 regulations carry this forward. Regulation 99 requires a licensee to report suspicious transactions to the FMU "in the manner and form required under the AML Act, 2010". It adds that nothing in PVARA's rules limits a licensee's duty "to submit STRs, CTRs or any other reports required under the AML Act". The currency transaction report threshold the NEC has just revised will therefore apply to licensed crypto firms too. We do not yet know the new figure.

The FATF context

The decision came during FATF Week. The FATF's plenary, its main decision-making meeting, runs from 28 to 30 October in Paris. Outcomes are due on Friday.

In July the FATF published a table of how countries are applying its crypto standard, Recommendation 15. We went through Pakistan's row at the time. It said "Yes" to a risk assessment, a licensing law and the travel rule. It said "No" to supervisory inspections of crypto firms and "No" to enforcement action. Pakistan's last R.15 rating, from 2020, is "partially compliant".

The press release does not mention the FATF. We are not saying the listing was made for it. But naming a supervisor with inspection and penalty powers on paper is one of the things a FATF assessor would look for.

What this means for Pakistani users

For anyone buying or selling crypto, nothing changes this week. No firm holds a PVARA licence. PVARA has counted 75 applications, with no licences and no published list. So PVARA has no licensed firm to inspect or fine under these powers yet.

What changes is what licensed firms will have to answer for later. A Pakistani exchange that fails to verify customers, keep records or report suspicious transfers would face PVARA under the AML Act as well as under PVARA's own law. Its directors and managers could be penalised personally.

For customers, that means the identity checks and questions about the source of funds that banks already ask will become standard at licensed crypto firms too. Expect the same paperwork, and the same delays when a transfer looks unusual.

Peer-to-peer trading between individuals is a different matter. The AML Act's supervisory powers apply to reporting entities, meaning firms, not to people trading among themselves. A bank that sees suspicious transfers on your account still reports them to the FMU, as it does now.

What we're watching

  • The Gazette notification adding PVARA to Schedule IV, and its date.
  • The new CTR thresholds, and whether the FMU publishes them.
  • The FATF plenary outcomes on 30 October, and whether they mention virtual assets or Pakistan.
  • PVARA's first NOC decisions. On its 60-day clock, those for complete applications filed by 5 September fall due around 4 November.

Sources

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