Pakistan's Federal Investigation Agency has established a specialised cryptocurrency investigation unit focused on money laundering and terror financing through digital assets, Dawn reported on July 21, 2026. The unit sits inside FIA's existing Anti-Money Laundering Wing and marks a significant institutional signal that Islamabad intends to enforce, not just regulate, its crypto sector.

The formation follows a rapid sequence of legislative moves. Parliament passed the Virtual Assets Act 2026 in March, creating a permanent mandate for the Pakistan Virtual Assets Regulatory Authority (PVARA) and explicitly naming FIA as a required coordination partner under Section 17 of the Act. FIA Director General Usman Anwar already holds a seat on PVARA's 11-member board. The new unit converts that structural role into an active investigative one.

The timing matters because enforcement responsibilities had previously been scattered. FIA's Cyber Crime Wing handled crypto-adjacent digital offences until February 2026, when those functions transferred to the newly autonomous National Cyber Crime Investigation Agency (NCCIA). The NCCIA inherited a substantial caseload: National Assembly data shows the agency received more than 150,000 cybercrime complaints in 2025, of which 81,996 involved financial fraud. That separation cleared space for FIA to concentrate on the financial crime dimension of crypto, including the intersection of digital assets and informal money transfer networks.

That intersection is substantial. Pakistan ranks third globally on Chainalysis's 2025 Global Crypto Adoption Index, behind India and the United States. An estimated 20 million Pakistanis hold or trade crypto, against roughly 420,000 registered stock market investors. The Takshashila Institution, an Indian policy think tank, estimates the country's underground crypto economy at somewhere between $20 billion and $25 billion; no Pakistani government or intergovernmental source has independently corroborated that figure. A separate Dawn Prism investigation estimated that crypto-enabled informal transfers form a hawala and smuggling subset worth more than $300 million, a specific slice of illicit flows rather than a measure of the broader underground economy. Much of this activity runs through what a 2025 Dawn Prism investigation described as a hybrid of traditional hawala and digital assets: USDT purchased peer-to-peer, routed through Telegram-based broker networks in Karachi and Peshawar, and cashed out through wallets in Dubai or Turkey with minimal documentation.

Financial expert Jawad Saleem described the structural pull behind this system. "Money is quietly exiting the formal system...because the system designed to hold money is slower, harsher, and more unpredictable than channels designed to move it outside," he said in a December 2025 analysis of Pakistan's informal economy. Pakistani press reporting has separately cited IMF estimates putting the country's tax losses at more than 6 percent of GDP, a figure said to exceed the country's defense budget, though that estimate has not been confirmed against a primary IMF document such as an Article IV consultation or Fiscal Monitor.

PVARA Chairman Bilal bin Saqib framed the regulatory path forward in terms of building infrastructure first. "With NOCs already issued and banking rails being developed in coordination with the State Bank of Pakistan, we are now moving toward a comprehensive licensing framework," he said. PVARA issued No Objection Certificates to Binance and HTX in December 2025, the first two exchanges to receive formal recognition under the PVARA ordinance framework. PVARA was originally established by the Virtual Assets Ordinance of July 2025; the VA Act 2026 subsequently made the authority permanent.

For those exchanges and any future licensees, the FIA unit adds a criminal enforcement layer on top of existing compliance obligations. Under the VA Act 2026, registered Virtual Asset Service Providers must connect to the Financial Monitoring Unit's goAML transaction reporting portal, apply Travel Rule requirements to cross-border transfers above defined thresholds, and file suspicious transaction reports. Non-compliance now carries investigative consequences, not just regulatory ones. Penalties for operating without a PVARA license can reach PKR 50 million alongside up to five years of imprisonment.

Retail holders are unlikely to be the primary focus. FIA Sindh had already begun monitoring peer-to-peer Binance activity for terror financing patterns before this unit existed, according to Dawn reporting, and the unit's stated mandate centers on illicit financial flows rather than simple possession. P2P traders facilitating large informal USDT-based transfers are more likely to face scrutiny. Developers and offshore platforms are also on notice: the VA Act 2026 applies extraterritorially, meaning unlicensed services targeting Pakistani users from outside the country fall within PVARA's purview. Legal analysts note that this extraterritorial reach extends to FIA's investigative mandate by virtue of its coordination role under Section 17 of the Act.

Pakistan's institutional arrangement now pairs a dedicated licensing body (PVARA) with a specialised investigative unit (FIA) and a central bank framework for exchange banking access. That combination is being watched by Bangladesh, Sri Lanka, and Nepal, all of which face similar pressures from FATF and similar tensions between large informal crypto adoption and underdeveloped enforcement capacity, in this publication's assessment. The country spent years on the FATF increased-monitoring list before being removed in 2023 following legislative reforms, and that arc stretches back to the State Bank of Pakistan's outright ban on crypto transactions in 2018. The VA Act 2026 and the FIA unit together represent Pakistan's effort to maintain its post-2023 standing while accommodating one of the world's largest and fastest-growing crypto user populations. Asia-Pacific crypto volume grew 69 percent year-on-year in the 2024 to 2025 period, according to Chainalysis, and Pakistan's third-place ranking on the global adoption index places it at the centre of that regional expansion. How the FIA unit operationalises its mandate over the next 12 months will determine whether that growth flows increasingly through regulated channels or continues running underneath them.