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.