Breaking News

Pakistan bans cryptocurrency trading, the first exchange Urdubit closed

The Urdubit, the main Bitcoin exchange in Pakistan, has been permanently closed. Earlier, the Central Bank of Pakistan announced a ban on transactions with cryptocurrencies. The trading platform urges customers to withdraw funds "as soon as possible." His team confirmed on social media that his business has been suspended due to the ban on cryptocurrency transactions. Other exchanges have followed suit.

Urdubit cancelled all Bitcoin orders

Pakistan’s “First Bitcoin Exchange” Urdubit declared closure after the National Bank of Pakistan banned all financial institutions from processing transactions related to cryptocurrency. Urdubit warned its customers to immediately withdraw their legal currency and cryptocurrency. The platform stated through Facebook and Twitter and its official website that due to the Central Bank’s ban, it will terminate the service.

On April 6, SBP (Pakistan's Central Bank) issued a circular on "Prohibition of virtual currency transactions", effectively prohibiting cryptocurrency transactions in Pakistan. Prior to this, the Indian Central Bank also issued a similar ban. SBP recommends that commercial banks and payment providers not use, trade, hold and transfer encrypted digital currencies. The document was signed by the head of the Bank of the State, Mohammad Javid, and stated that banks and companies should not facilitate transactions with customers and account holders.

According to Pakistani media reports, Urdubit, based in Karachi, is the country’s first Bitcoin exchange. The platform was launched in 2014 and is gaining popularity with the popularity of the world’s leading cryptocurrency. On Saturday, the team posted on Facebook saying:

Due to Sbp's current position on virtual currency, we are closing Urdubit. Recover your funds as soon as possible! Please buy BTC immediately as we are canceling orders or withdrawing your PKR [PKR] immediately.
Its website tells visitors: "Urdubit is shutting down!" Withdraw your funds to your bank account or wallet! The closed message was confirmed via Twitter and a message was released on Sunday: "Urdubit was closed." All Bitcoin withdrawals will end at midnight today, please withdraw your funds. After the decision was made to close, the trading volume of the platform increased during the weekend. According to Bitcoincharts, the company traded 26 bitcoins on April 6 and 6 bitcoins the next day.

The future of Pakistan's cryptocurrency trading is uncertain

The ban was implemented without formal government authorization, despite the lack of specific legislation on cryptocurrency. However, SBP requires Pakistani banks to “immediately” report all cryptocurrency transactions to the Financial Supervisory Authority (FMU). In addition, the central bank warns the public not to use cryptocurrencies to transfer funds abroad. SBP also made it clear that virtual currencies such as Bitcoin are not considered as legal tenders in the country.

It is not yet clear how many Urdubit customers have managed to get their money back. After closing on April 8, Bitcoin's trading volume was small. One of the warnings stated that if the customer fails to recover the funds, the exchange should not assume responsibility. There is no indication that Urdubit intends to reopen if the regulatory situation improves.

According to a company that cooperates with Urdubit, the exchange is trying to repay its customers. "The government and banks will oppose Bitcoin because investing it means that a bank is operating in the central bank," Rodrigo Souza, co-founder of Blinktrade, told the local online version of Propakistani. His company has been maintaining open source software used by Urdubit.

Some other Pakistani exchanges also decided to stay away from SBP. A message on the BTCPK website stated that the cryptocurrency quote was for information only. "The BTCPK follows the ban imposed by the Pakistani National Bank (SBP) in Circular No. 03 of 2018." The exchange claimed to be "the largest cryptocurrency exchange in Pakistan".

In the past, Islamabad authorities have shown a negative attitude towards cryptocurrencies. Recently, the Federal Investigation Agency investigated the cryptocurrency exchange. However, the SBP ban is by far the biggest blow to local cryptocurrency transactions.