The Federal Investigation Agency’s Khyber Pakhtunkhwa Zone has registered the province’s first-ever money laundering case over cryptocurrency transactions. The FIA uncovered that a trader named Danyal Farooq was operating various bank accounts containing more than Rs. 870 million worth of transactions – including Rs. 437 million in credit transactions and roughly Rs. 436 million in debit transactions – during the past three years.

Money Laundering Under the Guise of Cryptocurrency Transactions

As per details, people who wanted cryptocurrency used to deposit money in the suspect’s bank account, and he used to issue the cryptocurrency. An FIA official said that the use of cryptocurrency or any crypto-related transactions is banned in Pakistan as per the orders of the State Bank of Pakistan (SBP), and all transactions done by the suspect were unregulated, unlawful, and similar to illegal shadow banking.

The account statement of the accused revealed that from June 2020 – April 2021, the credit turnover of the account was Rs223 million, comprising online cash deposit of Rs101 million, inter-bank funds transfers of Rs51.8 million, and internet fund transfers of Rs42 million. The cash withdrawals revealed that Rs129 million was debited through cash mode, Rs55 million through IBFT, and Rs33 million through the internet fund transfer.

Digital Currency is Brewing Fraud, Money Laundering, and Terrorist Financing

The decentralized nature of blockchain technology has made it extremely difficult for governments all over the world to protect their citizens from fraud, money laundering, and terrorist financing. Hence, countries like China, Pakistan, and Iran are banning the use of digital currencies; to date, Pakistan does not have an effective strategy that allows it to reap the benefits of the digital currency sector while avoiding its potential dangers. Hence, it is wise to adopt a ‘wait and see’ as we cannot afford to associate the country’s name with illicit activities, considering the current economic crisis.

Also read: Binance Assures FIA its Full Support in the Investigation of the Multi-Million Dollar Crypto Scam


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