A massive amount of money may be circulating without oversight as Pakistan emerges as the world’s third-largest crypto adopter, according to Chainalysis’s 2025 Global Adoption Index. Most of this activity is driven by small individual investors. An earlier FPCCI report estimated that Pakistanis collectively hold nearly $20 billion in digital assets.

Research shows that beyond Binance, a substantial portion of crypto trading in Pakistan occurs through local peer-to-peer (P2P) platforms, which operate without KYC verification. These loopholes allow large sums to move across borders undetected.

The chairman of the Exchange Companies Association of Pakistan has warned that people are buying dollars from exchange companies and using them to purchase crypto, causing almost $600 million to “vanish” from the formal financial system. If accurate, this could place Pakistan at risk of scrutiny from the FATF, as crypto can facilitate money laundering and terror financing.

While Pakistan has begun creating a regulatory framework, progress remains slow. The Pakistan Crypto Council, formed this year, has yet to publish comprehensive guidelines. Similarly, the Pakistan Virtual Asset Regulatory Authority has only started inviting expressions of interest from global exchanges for licensing.

Given the widespread use of unregulated platforms and the scale of crypto transactions, the risk of illicit financial flows is significant. Authorities must act swiftly to strengthen regulations before global watchdogs raise concerns again.

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