Preface

Context: Pakistan has rapidly moved to formalize its cryptocurrency sector, combining regulatory initiatives with an enforcement response to criminal uses of digital assets. This article explains the new investigative unit launched by the Federal Investigation Agency (FIA), how it fits within the country's broader crypto strategy, and the tensions that remain between regulatory ambitions and religious concerns. Purpose: To summarize the establishment and mandate of the FIA’s cryptocurrency investigation unit, outline the National Command and Control Centre’s (NC3) role, and place these developments within Pakistan’s evolving crypto policy and public debate.

Lazy bag

Pakistan has created a specialized crypto investigation unit to target money laundering and terrorism financing through virtual assets. The unit operates inside the NC3, coordinating financial-crime tools, while PVARA focuses on regulation. The move strengthens enforcement even as religious and legal questions about crypto persist.

Main Body

Pakistan’s Federal Investigation Agency (FIA) has set up a dedicated cryptocurrency investigation unit to address the criminal use of digital assets, signaling a shift toward active enforcement alongside regulatory reforms. The new unit is embedded within the FIA’s recently activated National Command and Control Centre (NC3) and is tasked specifically with probing money laundering, terrorism financing and other illicit activities involving virtual currencies.

The creation of this unit follows a broad national push to incorporate cryptocurrencies into Pakistan’s financial and regulatory framework. Earlier measures have included lifting an eight-year ban on banking services for crypto businesses, forming the Pakistan Virtual Assets Regulatory Authority (PVARA) to oversee market rules, and moving toward licensing crypto exchanges. Together, these steps demonstrate Islamabad’s intent to bring digital assets into the formal economy rather than leaving them in an unregulated space.

FIA Counter-Terrorism Wing Director Dr. Muhammad Athar Waheed has explained that while PVARA will continue to handle licensing and regulatory oversight, the FIA unit’s role is to investigate and disrupt the illicit use of virtual assets. The NC3 consolidates various financial-crime capabilities on a single platform: anti-money-laundering desks, virtual-currency investigation teams, an Interpol coordination point, open-source intelligence units, cyber patrol operations and dark web investigation specialists. This integrated approach is meant to speed inquiries, enhance information sharing and improve operational responses to evolving crypto-enabled threats.

Officials have also called on other agencies to build similar capacities. The National Cyber Crime Investigation Agency and the Anti-Narcotics Force were urged to establish crypto-focused teams to address cases where digital assets intersect with cybercrime or drug trafficking. Additionally, new procedural rules are reportedly being drafted to ensure investigations are completed within fixed timeframes, a measure intended to increase efficiency and legal certainty in enforcement actions.

Pakistan’s broader engagement with crypto includes diplomatic and commercial outreach. The country ranked third in Chainalysis’s 2025 Global Crypto Adoption Index, reflecting significant local activity and public interest. Policymakers have discussed tokenizing state assets, advanced licensing regimes for exchanges and even explored cross-border payment solutions tied to a U.S. dollar stablecoin in partnership with a firm affiliated with World Liberty Financial, a crypto venture linked to former U.S. President Donald Trump’s family. These initiatives illustrate a willingness to experiment with blockchain-based instruments for financial and economic purposes.

However, this embrace of digital assets has not been without controversy. In June, the influential Jamia Darul Uloom Karachi seminary issued a fatwa declaring that cryptocurrency does not constitute "wealth" under Islamic law and therefore cannot be used as a valid means of payment. That religious ruling cast doubt on the government’s plans and sparked debate over the permissibility of crypto under Shariah principles. In response, PVARA’s chairman Bilal bin Saqib has asked religious scholars to distinguish between speculative tokens and asset-backed instruments like fully reserved stablecoins or blockchain-recorded sukuk. He has suggested Pakistan could potentially lead in developing Shariah-compliant digital financial products, but acknowledged the need for clearer religious guidance.

For now, the FIA’s crypto investigation unit provides Pakistan with an enforcement capability to match its regulatory progress. The unit is intended to deter criminal exploitation of virtual assets and to support a safer transition as the country builds out its legal and operational infrastructure for digital finance. At the same time, unresolved questions about Islamic legal acceptance of cryptocurrencies and the challenge of balancing innovation with consumer protection mean the policy landscape will continue to evolve.

In sum, Pakistan’s approach combines regulatory institution-building, financial sector reopening, and law-enforcement capacity expansion. The establishment of the FIA’s dedicated unit represents the enforcement pillar of that strategy: a step meant to reduce crypto-enabled crime while authorities continue to define how digital assets should be governed and whether certain instruments can be reconciled with religious and legal norms.

Key Insights Table