👉 Pakistan Prepares For Heavy-Handed Crypto Ban

The central bank of Pakistan along with its federal government have both recently suggested that cryptocurrencies and all associated activities be outright prohibited for the foreseeable future. Their report has been forwarded to the local finance and law ministries for further consideration.

This incident comes shortly after the FIA (Federal Investigation Agency) of Pakistan issued an inquiry to Binance as part of an ongoing criminal investigation into a scheme in which Binance wallets as well as integrated applications were reportedly utilised to swindle around $100 million from Pakistani consumers.

Imran Riaz, the head of the FIA Cyber Crime Zone Sindh, tweeted a letter dated January 6th which was written to Binance's Cayman Islands headquarters and the general manager of Binance Pakistan, Humza Khan.

According to the letter, there had been countless complaints regarding an online financial scam which had occurred within Pakistan involving bogus applications that robbed innocent individuals of millions of dollars. It further stated that as of right now, the investigation has discovered fake accounts on 11 different applications which include UG, TASKTOK, 91FP, BX66, BB001, OKIMINI, FXCOPY, HFC, MCX, and more. During the investigation, over 25 Binance wallets were discovered to be connected to the fraudulent applications.

It seems increasingly apparent that the Pakistani government and its central bank, the State Bank of Pakistan, will outright prohibit cryptocurrencies. According to various local media channels and outlets, the supposed total ban suggestion would penalise any and all cryptocurrency exchanges such as Binance and Coinbase and all related crypto-oriented activities. Currently, the prohibition is only a proposal, and it is uncertain whether it will be fiercely contested as authorities continue to analyse it with the tentative date for the final decision being said to be around mid April, 2022.

Additionally, the SHC (Sindh High Court) has been investigating the legality of virtual currencies for many years now, but this is the first instance of the central bank taking an official position pertaining to the cryptocurrency asset class. The SHC had previously requested that the asset class be regulated by the government in October 2020, however with the new recommended prohibition, none of that would be necessary if crypto in Pakistan is banned completely.

Jack Dorsey, CEO of Block, formerly known as Square, announces plans to provide greater decentralization to Bitcoin; bringing easier affordable participation in the Bitcoin mining process to the masses, through a new Bitcoin mining system. The project sets out to address several pain points in the current Bitcoin ASIC mining business including access to equipment, cost of equipment, reliability of equipment and vendors, while also tackling the biggest elephant on the list, power consumption. The ultimate rollout of these efforts being that Bitcoin mining is more accessible to everyone, and Bitcoin becomes more decentralised as a result. Lofty goals with an excellent narrative that has improving upon Bitcoin’s core fundamental strength, decentralised control, at its heart.

In a time when Proof of Stake Coins and moves to Proof of Stake consensus (Ethereum) are in the spotlight, Jack Dorsey moves his company to support and expand the most popular cryptocurrency Bitcoin’s Proof of Work system. The two systems both offer decentralisation but to different degrees. Technically when Ethereum moves to Proof of Stake consensus it is still decentralised, though it will be to a far less degree than presently. Is that the correct direction evolving towards a less decentralised network? In light of the current crypto trends/sentiment, and an aspiring fully decentralised Web3, we think not.

Node purchase or a stake on Ethereum 2.0 is set to be 32 Ethereum. These 2.0 Ethereum nodes or stakes will replace current miners on the Ethereum network and start earning the rewards for validation of transactions. A future buy-in to producing Ethereum will be to commit 32 Ethereum to a stake, an enormous price tag even today. Presently anyone with a video card in their computer can support the Ethereum network and earn rewards. In the future it will only be the wealthy that can afford to be rewarded. Thus, the Ethereum network will be centralised among wealthy people only.

Jack has a strong case championing the decentralisation component in Bitcoin and crypto, striving to retain and develop further incentive for the "little guy" to participate, adding to Bitcoin’s decentralisation and strength as a network. We think he is heading Block in the right direction and working towards Web3 aspirations of online privacy, decentralised control, fewer online monopolies, and a system that everybody can support, and be rewarded for doing so.