Digital Currency Trade On The FIA Radar

A number of companies are facing investigations on the suspicion of being involved in illegal digital currency trade business in Punjab.

A number of companies are facing investigations on the suspicion of being involved in illegal digital currency trade business in Punjab.

The Federal Investigation Agency (FIA) has launched the investigations after receiving the related Specific Transaction Record (STR) from the State Bank of Pakistan (SBP).

Federal Minister for Science and Technology Fawad Chaudhry told The Express Tribune that digital currency had not been legalised in Pakistan yet but a meeting of a committee working on the issue had already taken place. “Suggestions have been sought from the SBP and other authorities concerned in this regard.”

The minister said legislation to legalise the digital currency business was expected within the next four months.

So far, no company had been allowed to trade digital currency in Pakistan, he added.

Preliminary investigations be the FIA Cyber Crime Wing Lahore have revealed that digital currency business is being done on a large scale in Gujranwala, Faisalabad, Sargodha, Sialkot, Multan, Gujrat and other cities.

It is suspected that money laundering is also being done through the trade.

After the FIA received STR of more than Rs70 million from the SBP, it investigated various companies and found that at least 10 firms across the province, including Lahore, are working with Pakistanis abroad and they are becoming a big means of money laundering.

Some people have also started giving regular training in how to trade in digital currency. The trade is being operated in other countries including Thailand, Malaysia, Singapore, Australia, Canada, the UK, France, New Zealand, Poland, Abu Dhabi and Dubai. Some of these countries have legalised digital currency. That is why the business has been in Pakistan through online chatting, while some companies have illegally appointed their representatives in the country for the purpose without seeking approval from the SBP.

The digital companies are allegedly illegally trading currency with the dollar without a licence. According to the investigators, transfer of capital from the countrys is been carried out through the online trading of the companies. The business does not require an office but a computer or smart phone with an internet connection. This has made it difficult to trace the operatives of the unauthorised trade.

According to FIA sources, extensive action has been taken against money launderers and hawala, hindi traders due to the requirements of the global Financial Action Task Force (FATF). During the action in various areas of Punjab, FIA teams have also nabbed people involved in the jewellery business in big markets and plazas, reportedly recovering over Rs10 billion from them.

The officials believe that because of the crackdown by the government, the people associated with the illegal money transfer business have now started the work in the guise of digital currency.

The sources said the biggest example was bitcoin, currently valuing more than Rs4.74 million. Transactions are easily made by calculating the value in US dollars and it is difficult to track the money trail because people can transact through their phones.

According to the FIA sources, so far most of the people associated with freelance software work have been found involved in the digital currency trade, taking advantage of the large scale facilities provided by the government to information technology companies.

Originally published at The Express Tribune

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