Pakistan to close down nine cryptocurrency dealers

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On March 28, the Securities and Exchange Commission of Pakistan (SECP) announced proceedings to close down nine agencies that were fraudulently dealing in cryptocurrencies. This comes as untimely news considering there are reports that the intelligence services in the country had worked out plans to allow for the legalization of cryptocurrency sales.

According to the report, the SECP initiated actions against nine companies – Gold Transmit Network Technology (Pvt) Limited, Green Apple Super Market (Pvt) Limited, Galaxy Typing Jobs (SMC-Pvt) Limited, 3-A Alliance (Private) Limited, Pak Memon Impex (Private) Limited, Memon Corporation (Pvt.) Limited, Humanitas Meritus (SMC-Private) Limited, IDG Enterprises (Private) Limited and Ayat Enterprises (SMC-Private) Limited.

The companies are accused of using cryptocurrencies in an apparent Ponzi Multi-Level marketing scheme not only related to the digital currencies themselves but also as part of an employment scheme. The SECP initiated these proceedings under section 301 and section 304 of the Companies Act.

According to the complaint, the companies involved were unlawfully accepting deposits, leasing cars, houses, and other property as well as materials and goods without proper authority from the governmental agencies involved. The scheme offered large profits and incentives, but appear to be nothing more than a Ponzi scheme.

This cannot be welcome news for Pakistani finance minister Asad Umar, who just 10 days ago was fighting off rumors that the top intelligence agency in Pakistan had approved the legalization of Bitcoin Core (BTC) trading across Pakistan. The plan would not only allow for the sales, but designed implementation plans, policies, and regulations related to the sale and enforcement of the cryptocurrency market.

Pakistan has been looking for ways to raise revenue, and the sale of cryptocurrency was viewed as an ideal option. With government regulation involved, it ensured that taxes could be collected on those who were trading and acquiring the digital currencies as an investment.

No word has been given as to if this policy has been formally approved by the finance minister, but the action by the SECP may be a preemptive step to ensure that these companies were unable to defraud customers just as the legalization of the digital currency sales is about to occur.

As part of the filing, these companies will be shut down and barred from operating within the borders of Pakistan. No details were issued in the release as to what further actions would be taken or if the companies were able to appeal the decision. In addition, no executives or personnel at the nine companies appear to have been charged with any crime under Pakistani law.