Terror funding, extortion using digital currencies on the rise in Pakistan — officials

A Pakistani vendor counts currency notes at his roadside stall in Islamabad on December 15, 2011. (AFP/File)
Short Url
Updated 04 February 2021

Terror funding, extortion using digital currencies on the rise in Pakistan — officials

  • Militant groups around the world have recently been calling on supporters to donate using digital currencies like bitcoin
  • Karachi engineer arrested last month for sending bitcoin donations to Syria militants, police say ransom and extortion money also being demanded in bitcoin

KARACHI: Police officials in Pakistan say the use of digital currencies, including bitcoin, for international terror financing and crimes like extortion and ransom, is on the rise in the country as authorities move to tighten the reins on illegal methods of money transfer.
Bitcoin is the most common virtual currency and is used as a vehicle for moving money around the world quickly and anonymously via the web without the need for third-party verification.
Militant groups around the world, including Daesh, have increasingly called on supporters to donate using the digital currency.
Pakistan has recently moved to meet 27 targets set for it in 2018 when the South Asian nation was placed on a Financial Action Task Force “grey list” of countries with inadequate controls over terror financing. The task force has urged Pakistan to complete an internationally agreed action plan by February 2021. The next virtual plenary of the task force is scheduled for February 22-25.
“We are seeing this trend [of using bitcoin for crimes] since we tightened the noose around illegal systems of transferring funds,” Raja Umar Khattab, head of the Transnational Terrorists Intelligence Group in Sindh’s counter-terrorism police, told Arab News.
Last month, Khattab arrested Hafiz Muhammad Omar Bin Khalid, a Pakistani engineering student charged with sending bitcoin donations to militants in Syria. Khalid had transferred over Rs1 million by the time he was caught, counterterrorism department (CTD) deputy inspector general Omar Shahid Hamid told reporters last month.
The engineering student had also previously been arrested, and released, in 2018 for extending financial support to an Al Qaeda militant in Afghanistan, officials said.
In December 2019, Khalid came across a Telegram account online that guided him on how to help widows of Daesh militants in Syria.
“Help jihadis and their families by sending money through bitcoins,” said one user on the Telegram group, leading Khalid down a rabbit hole of searches into bitcoin wallets, which in turn led him to an associate named Zia Shaikh Turk, based in Hyderabad, who converted cash into bitcoin and sent it off to ‘jihadi brides’ in Syria, according to officer Hamid.
The Pakistani widow of a militant, who Khalid identified as Umme Bilal, had also asked him to open a mobile wallet account, according to interrogation reports available with Arab News.
“Umme Bilal asked me to open an EasyPaisa [Pakistani digital payment system] account as some of her acquaintances hadn’t heard of bitcoins, but wanted to contribute,” one intelligence report said, quoting Khalid. “I got Rs450,000 into my account, added another Rs100,000 of my own, converted them into bitcoins and sent them to Syria.”

Policemen stand guard as women queue to collect cash of financial assistance through a mobile wallet in Islamabad on April 9, 2020. (AFP/File)

Last year, a US citizen of Pakistan origin, Zoobia Shahnaz, was sentenced to 13 years’ imprisonment for providing material support to foreign militant organizations, specifically more than $150,000 to Daesh.
Shahnaz, 27, from Long Island, admitted to wiring more than $150,000 to individuals and shell entities that were fronts for Daesh in Pakistan, China and Turkey in 2017. She was engaged in a scheme to scam Chase Bank, TD Bank, American Express and Discover by fraudulently obtaining six credit cards, according to a court filing. She then bought more than $62,703 in bitcoin and other cryptocurrencies, and converted them to cash.
An official at the Federal Investigation Agency (FIA) told Arab News the agency had received tens of complaints in recent months by victims asked to pay ransom and extortion in the form of bitcoin. The official did not go on the record as he was not authorized to discuss the cases with the media.
“Cryptocurrency has been used in international as well as local cases of extortion, kidnapping for ransom, harassment and money laundering as there is no centralized monitoring system,” the official said.
In December, a female student in Karachi was blackmailed by an unknown sender who had uploaded her private photos to a pornographic website and demanded Rs3 million in bitcoins in exchange for removing them. The FIA traced the case to a man in an African country who had hacked the girl’s Snapchat account and eventually taken control of her phone. The alleged blackmailer has since removed the pictures himself.
In another case, a truck contractor in Karachi told Arab News he got a call from an Afghanistan number by a man who knew where he lived and had intricate details of the movements of his family. The man demanded extortion money in bitcoins or else his family would be harmed. The trader declined to be named for fear for his family’s safety but said he had eventually paid the money using digital currency.

This photograph shows a man holding a physical imitation of a Bitcoin at a crypto currency "Bitcoin Change" shop, near the Grand Bazaar, in Istanbul, on December 17, 2020. (AFP/File)

Such cases have led to calls for a complete ban on virtual currencies in Pakistan, while advocates for regulation have also become more active.
Last month, Rehan Masood, a lawyer for the Pakistani central bank, told the Sindh High Court the State Bank had issued a warning about dealing in cryptocurrencies but not banned them.
Pakistan’s central bank issued a circular dated April 6, 2018, advising financial institutions, including banks and payment service providers, “to refrain from processing, using, trading, holding, transferring value, promoting and investing in virtual currencies/tokens.”
The circular said financial institutions “will not facilitate their customers/account holders to transact in VCs/ICO tokens. Any transaction in this regard shall immediately be reported to [the] Financial Monitoring Unit (FMU) as a suspicious transaction.”
TV host Waqar Zaka, an advocate for allowing cryptocurrency in Pakistan, who last January filed a court case against the Federal Investigation Agency for arresting people for possessing bitcoin, described trading in virtual currencies a fundamental right.
“Any ban will deprive Pakistanis of earning the biggest profits,” Zaka told Arab News. “The top countries on FATF have been dealing in cryptocurrency because they know that bitcoins don’t work without the Internet, which has a digital trace.”
Independent blockchain and cryptocurrency expert Hassan Raza agreed, saying a complete ban on blockchain based payment networks should be “out of the question.”
“Terror financing is also done via the banking system but those clearly have not been banned,” he said, adding that the government should regulate, not ban, digital tokens.
“Since every transaction in a public blockchain network like bitcoin is stored in a permanent and immutable distributed, public database, anyone is free to view them and conduct data analysis of any complexity on them,” Raza said. “In fact, several people allegedly involved in illegal activity have been caught in this very manner.”

No plans to impose economic emergency in Pakistan — finance division

Updated 06 December 2022

No plans to impose economic emergency in Pakistan — finance division

  • Rebuts “false message” on economic emergency proposals
  • Says IMF negotiations on ninth review in “advanced stage”

KARACHI: The finance division on Tuesday “strongly” rebutted reports that the government was considering imposing an economic emergency in the country, saying it had put in place a number of austerity measures to deal with a difficult economic scenario.

The South Asian nation, which is reeling from devastating floods that are estimated to have caused over $30 billion of damage, has been facing a balance of payments crisis with fast-depleting foreign reserves and a widening current account deficit.

Referring to a “false message” on economic emergency proposals, the finance division said:

“Finance Division not only strongly rebuts the assertions made in the said message but also categorically denies it and that there is no planning to impose economic emergency.”

The division said the message was aimed at creating “uncertainty” by those who did not want Pakistan to prosper and were against the “national interest.” It attributed Pakistan’s economic crisis to “exogenous factors” like the Russia-Ukraine war, global recession, trade headwinds, a commodity super-cycle, and devastation caused by record-breaking floods this summer. 

With the reserves down to hardly one month of imports, Pakistan desperately needs bilateral and multilateral external financing as it awaits the 9th review of a $7 billion bailout package from the International Monetary Fund (IMF), pending since September.

Both Pakistan and the IMF said last week that pre-review talks had begun online.

The IMF approved the seventh and eighth reviews together in August for the bailout program agreed in 2019, to allow the release of over $1.1 billion.

In its press release, the finance division said negotiations with the IMF on the ninth review were at an “advanced stage.”

Following Supreme Court order, Islamabad police register case in murder of journalist Arshad Sharif

Updated 06 December 2022

Following Supreme Court order, Islamabad police register case in murder of journalist Arshad Sharif

  • Three people nominated as key suspects in the murder that took place in Kenya last month
  • Supreme Court takes suo motu notice of murder, orders government to register FIR by day end

ISLAMABAD: Following the orders of the Supreme Court of Pakistan, police in Islamabad on Tuesday registered a case in the murder of journalist Arshad Sharif in Kenya in October, nominating three people as key suspects in the crime.

Under Pakistani law, the police are required to respond to any complaint about a potential crime by registering a case, or a “first information report.” That report marks the beginning of an investigation.

The police complaint nominated three persons, Waqar Ahmed, Khurram Ahmed, and Tariq Ahmed Wasi. It cites sections 302 (murder) and 34 (acts done by several persons in furtherance of a common intention) of the Pakistan Penal Code (PPC).

The FIR added that according to the postmortem report, Sharif died due to the firing of ammunition.

“Arshad Sharif has been killed abroad in Nairobi [Kenya]. The involvement of Khurram Ahmed, CNIC number 42301-9410336-5, Waqar Ahmed CNIC number 42301-3062658-9, both sons of Afzal Ahmed, and Tariq Ahmed Wasi son of Muhammad Wasi CNIC number 42301-8003405-3 in this murder has been proved,” the FIR said. 

Earlier on Tuesday, the Supreme Court took suo motu notice of the murder and ordered the government to register an FIR by the end of the day.

Chief Justice of Pakistan Umar Ata Bandial on Tuesday used Pakistan’s so-called “suo moto” provision — which allows him to take up cases on his own initiative — to set up a bench of five judges to supervise an investigation into the killing of the prominent television journalist in Kenya in October.

Sharif left Pakistan in August over threats to his life and after a slew of court cases related to charges of treason and others were registered against him. He was killed by Kenyan police on the outskirts of Nairobi on October 23, in what police said was a case of “mistaken identity” during the search for a car involved in a child abduction case.

But a two-member Pakistani fact-finding team that visited the East African state subsequently called the killing a “targeted assassination.”

The court said it had sought initial responses from the Pakistani foreign office, interior ministry, information secretary and the Federal Investigation Agency (FIA) and Pakistan Federal Union of Journalists (PFUJ).

“The journalist community and the public at large are deeply distressed and concerned about the death of the senior journalist and are seeking the court’s scrutiny of the matter,” the court said in a statement.

Sharif worked for many years as a prime-time television news show host for ARY News in Pakistan. In the last year of his life, he was known to be a harsh critic of the military and a supporter of ex-PM Imran Khan.

Khan has said Sharif had been murdered for his journalistic work and called for a judicial investigation.

Unable to travel to Qatar, fans in Karachi’s Lyari hold World Cup viewing party of thousands

Updated 06 December 2022

Unable to travel to Qatar, fans in Karachi’s Lyari hold World Cup viewing party of thousands

  • Large screens set up in the neigborhood, murals of favorite players and flags fill the walls
  • Lyari’s craze for the Brazilian team has earned the neighborhood the nickname ‘Mini-Brazil’

KARACHI: When Brazilian footballers Vinícius Júnior, Neymar, Richarlison, and Lucas Paquetá scored for their side in the first half of a match against South Korea this week, thousands of fans erupted into wild cheers and danced as their favorite team’s entry into the quarterfinals of the FIFA World Cup 2022 was sealed.

The scene of the raucous crowd, with many sporting the classic yellow and green colors of the Brazilian team, was not from Stadium 974 in Doha, Qatar, where the match took place. It was from Karachi’s Lyari neighborhood, whose soccer craze has earned it the nickname ‘Mini-Brazil,’ and where large murals of the Brazilian flag and players now fill the walls and giant TV screens are set up for thousands to watch their favorite teams at play.

Every time the World Cup rolls in, Lyari becomes a “festival,” football fan Habib Hasan, 55, said.

“The people of Lyari love football to the level of craziness,” he told Arab News, standing among a crowd gathered in front of large television screens set up for residents of Lyari and beyond to watch the match.

“People want to watch it in person but they cannot travel there [to Qatar] so they enjoy it here by creating an atmosphere like this … When a match concludes, you will see people in the streets and neighborhoods, taking out rallies on roads, with boys on motorcycles holding flags. They express their happiness by playing dhol [drums] and doing the Leva [Baloch dance].”

Fans cheer as Brazil enters the quarterfinals of the FIFA World Cup 2022 in Karachi's Lyari neighborhood, Pakistan, on December 5, 2022. (AN Photo)

Moulvi Usman Park is one of nearly 50 places in Lyari where screens have been installed and World Cup matches shown through projectors this season. For Monday’s game between Brazil and South Korea, even Sindh Chief Minister Murad Ali Shah showed up to watch.

“The match was fantastic. Brazil was playing South Korea and the people of Lyari really enjoyed themselves. You can see the environment, it’s fantastic,” Murtaza Wahab, administrator of Karachi, told Arab News after the match. “The chief minister was here himself.”

Javed Ibrahim, a super fan of former Brazilian legend Roberto Carlos, introduced himself as Javed Carlos.

“I can leave my parents but not Brazil,” he said. “I’m a diehard Brazilian team fan who grieves the team’s defeat and celebrates its victory.”

“When there is a match of Brazil, then you know that the World Cup has really started. Look around you now, the World Cup has started. There is much passion. When the Brazilian team plays, the masses get electrified.”

Many fans regretted that Neymar had to miss Brazil’s last group game at the World Cup because of his right ankle injury, not recovering in time to face Cameroon in the Group G game on Friday.

But they cheered saying that this return helped Brazil thump South Korea 4-1.

“The people of Lyari really regretted that Neymar was not playing the previous match. Now Neymar is here and Brazil has won with four goals,” fan Ali Baloch said.

“I want to see a France versus Brazil final.”

“He [Neymar] is the beloved of our nation,” another fan screamed. “Neymar is our cousin. We love him.”

Behind him, thousands of fans chanted: “Only Brazil, only Brazil.”

Pakistan ‘deeply regrets’ India turning down visas for blind cricket team 

Updated 43 min 34 sec ago

Pakistan ‘deeply regrets’ India turning down visas for blind cricket team 

  • Foreign Office says it had conveyed Islamabad’s disappointment to India 
  • T20 World Cup Cricket for the Blind taking place in India from December 5-17

KARACHI: The foreign office on Tuesday “deeply regretted” India rejecting the visas of the country’s blind cricket team, effectively blocking its participation in the ongoing T20 World Cup Cricket for the Blind.

The tournament is taking place in India from December 5-17.

“As a result of the Indian decision, Pakistani players would be deprived of the opportunity to participate in an international sporting event of special significance,” the foreign office said. “This reflects India’s insensitivity toward promotion of sports meant for differently-abled persons.”

The sports events must not be politicized, Pakistan said, adding that the foreign office had conveyed Islamabad’s disappointment to the Indian side.

Earlier in the day, Syed Sultan Shah, Chairman of the Pakistan Bling Cricket Council, announced that the Indian Ministry of External Affairs had denied the Pakistan Blind Cricket team clearance on “political grounds.”

He said Pakistan was a serious contender to win the World Cup as it had been the runner-up twice in the earlier two editions of this format in 2012 and 2017.

“The Pakistani team has also beaten the current T-20 World Champion India five times consecutively in the last five encounters during two tri-nation competitions in 2021 and 2022, respectively.”

“It was highly likely that Pakistan and India would have locked horns in the final of the ongoing World Cup and considering the current form of the Green Shirts, Pakistan had a high chance to win the World Cup,” he said.

PBCC “strongly condemned this discriminating act of India,” Shah said.

“Our counterpart Blind Cricket Association in India pleaded with their Govt for Pakistan clearance but nothing was heard,” he added.

Shah said the present Indian government’s “hatred” toward Pakistan also violated the United Nations Charter for Persons with Disabilities (UNCRPD) which induces States to provide equal sports playing opportunities to Persons with Disabilities, he added.

“This discriminating act will have serious consequences on Global Blind Cricket as we at World Blind Cricket will take stern action against them and may not allow India to host future international events.”

The Indian and Pakistani teams were set to face each other at the Siri Fort Ground on December 7.

“We all know it is a challenge to get visas for Pakistan cricketers. The MEA is working on it and we are confident that by the end of the day, they will get their visas,” Mahantesh GK, the president of the Cricket Association for the Blind in India (CABI) had told journalists on December 1.

CEO of Islamabad's Centaurus Mall cries 'political victimization' after building sealed

Updated 06 December 2022

CEO of Islamabad's Centaurus Mall cries 'political victimization' after building sealed

  • Sealing happened morning after AJK PM, whose family owns mall, sparred with PM Sharif
  • CDA spokesperson says mall sealed due to violation of building rules, illegal construction

ISLAMABAD: The Capital Development Authority (CDA) on Tuesday sealed Islamabad’s Centaurus Mall, a move that has been widely viewed as “retaliation” by the Pakistan government a day after the prime minister of Azad Jammu and Kashmir, whose family owns the mall, sparred with Prime Minister Shehbaz Sharif at an official event. 

In videos shared on social media, Sardar Tanveer Ilyas is heard asking Sharif questions about what his government had done for Kashmir. The exchange took place at the inaugural ceremony of the refurbishment project of Units 5 and 6 of the Mangla Dam Hydroelectric Power Plant on Monday.

Sharif, who was about to conclude his speech at the event, is seen gesturing and asking the AJK premier to retire to his seat.

The following day, traders and employees of the mall arrived for work to find a notice pasted on the door saying the premises had been sealed on account of building and other violations.

“Basically, there was some hard talk between prime ministers of AJK and Pakistan at an event which took place in Mangla and subsequent to that hard talk as retaliation the government gave instructions to CDA to seal the building at 3am at night,” chief executive officer of Centaurus Mall, Sardar Yasir Ilyas, told Arab News. “I am surprised that a business is being politically victimized.” 

Yasir is the younger brother of the AJK PM and the mall is owned by their father Sardar Ilyas Khan.

“You are draining an international project which will compromise the confidence of local and overseas investors,” he added. 

Ilyas said the closure would cause billions of rupees in losses of general sales and income tax because all the shops at the mall were linked with the Federal Board of Revenue system.

How was the mall functioning for nearly a decade if it did not conform to building rules, the CEO asked. 

“This project is running since 2013 so how you can close it overnight without giving any notice, without giving any warning,” Ilyas said. “And you are sealing it at 3am in the morning, so this means you have mala fide intentions.”

A CDA spokesperson, however, said the mall was being sealed due to non-compliance and violation of building rules.

“The mall is not sealed due to any political motive as we have already served so many notices to them since 2021,” CDA spokesperson Asif Ali Raza Shah told Arab News. 

“It is not only this mall but last month we issued notices to almost 600 buildings in the capital city.”

“As it [Centaurus] is a sensitive and very crowded place, we have to ensure implementation of the laws, otherwise the media and court will ask from us,” Shah added.

The CDA notice issued to the mall says the building management had “illegally” constructed offices and a training center and a storage facility in the basement of the building which was reserved for parking space. It also said it was illegally charging parking fee from the public.

Atta Tarar, ruling party leader and special assistant to PM Sharif, said the Centaurus Mall had been issued four notices, two of them during the last government’s tenure, over violations and failure to conduct building inspections.