ISLAMABAD: Pakistani TV personality Waqar Zaka on Friday denied allegations he was involved in a cryptocurrency scam after a local court issued his non-bailable arrest warrant for allegedly carrying out cryptocurrency transactions amounting to Rs173 million ($7.6 million).
The development comes amid an intensifying global crackdown against individuals using digital currencies and virtual assets. Zaka, who launched a campaign in Pakistan for the acceptance of virtual currencies as legal tender in the country, has been facing a Federal Investigation Agency (FIA) inquiry against him that showed he had maintained two accounts for trading cryptocurrencies and other virtual assets.
Zaka’s warrant has been issued only a few days after the arrest of Sam Bankman-Fried from the Bahamas where he set up the FTX crypto exchange which, according to international prosecutors, was used to steal billions of dollars and was a “fraud of epic proportions.”
Several countries, including China, have already mounted a crackdown against digital currencies which they have declared illegal. According to Geo News, Zaka’s case has been “taken up by Judicial Magistrate (East) Mukesh Kumar” in Karachi.
“The magistrate directed the FIA prosecutor to submit a report regarding the execution of the warrant on the next date and adjourned the hearing until January 5, 2023,” it added.
However, Zaka told Arab News he had always declared his wealth with Pakistan's tax authority, the Federal Board of Revenue (FBR). “FIA Cyber Crime is trying hard to show that the money Waqar Zaka is bringing to Pakistan through the banking channel is wrong," he said.
Zaka said whatever money he earns from Facebook, he brings to Pakistan. "Any person who is involved in money laundering, does he bring money to a Pakistani bank," he questioned.
Geo said the FIA inquiry into Zaka’s transactions showed that he used social media to gather charity and international funding while withdrawing the money through pay order and interbank fund transfer.
“During the enquiry, Bitcoin/cryptocurrency-related posts were found on his Twitter account,” the FIA said. “The accused also promotes cryptocurrency like Bitcoin through YouTube channels.”
Zaka said the Financial Monitoring Unit—a Pakistani agency formed under the Anti Money Laundering Ordinance—has complained that Rs80,000,000-90,000,000 ($353,440-397,620) were transferred to his account through remittances via a banking channel.
"It is a crime in Pakistan to bring remittances," Zaka said. "It [the FBR] says he [Zaka] speaks against state organizations," he lamented.
The TV personality said a money laundering case against him had been dismissed by the judge in April this year. Zaka said the judge had asked the FIA to revise the challan against him or take it back.
"The FIA Cyber Crime kept delaying it until December and finally they had to submit something,” he said.
Pakistan’s central bank said earlier this year the risk associated with cryptocurrencies outweighed its benefits after financial scams related to them were reported by the country’s media.
Investigator estimated some 37,000 people, mostly from middle-class households in Punjab’s Faisalabad city, had been defrauded after investing money in schemes that promised to multiply it.
While the State Bank of Pakistan said last month it was trying to figure out if it should launch its own digital currency, virtual assets are not recognized as legal tender in the country.
The FIA also blamed Zaka for launching false propaganda against it after it launched the inquiry and found him “involved in illegal activities,” Geo added.
