The transition was a narrow accommodation for established activity
The transitional regime is often misunderstood as a general grace period for the virtual-asset industry. It was not. Section 70 of the Virtual Assets Act, 2026 addresses a person already providing Virtual Asset Services immediately before the Act commenced. That factual condition matters before any question about filing dates arises. A business conceived after commencement cannot acquire transitional status merely by showing that its founders previously traded virtual assets personally or that a foreign affiliate operated elsewhere. The relevant inquiry is which legal or natural person actually supplied a service, where the service was carried on, to whom it was offered, and whether that same service existed immediately before commencement. The regulatory treatment of a legacy provider therefore begins with a dated factual account, not with a general description of the Pakistani crypto market.
The six-month period and PVARA's stated filing date
Section 70(1) requires a qualifying existing provider to apply within six months of commencement or cease providing the relevant services. PVARA's official licensing guidance identifies 5 March 2026 as the commencement reference date for transitional operators and states that the NOC application had to be submitted by 5 September 2026. The date is a historic statutory milestone, not an open invitation to submit an initial transitional filing at any time thereafter. The notified Pakistan Virtual Asset Services Regulations, 2026, made by S.R.O. 1419(I)/2026 on 21 August 2026, contain Regulation 5A addressing the practical operation of this transition. A lawyer assessing a disputed filing should read the Act, Regulation 5A and the Authority's dated correspondence together, rather than rely on a calendar entry or a platform's public statement that an application was “in process”.
What the application must establish
Regulation 5A(2) deals with a complete application satisfying the requirements of the NOC application under the notified framework. The word “complete” is consequential. A portal registration, draft application, payment receipt or email asking for information is not necessarily evidence that the Authority received a complete application within the statutory period. Regulation 6 and the Annexure to Form I describe the information expected for preliminary approval, including the proposed business, licence categories, ownership and controller information, governance and the intended operational model. The full licence stage has additional requirements, and Regulation 7(2) makes written confirmation of completeness particularly important for the later licensing decision clock. For transitional analysis, preserve the submitted form, attachments, payment evidence, system acknowledgements, any defect notices and the precise status communicated by PVARA. Those documents may determine whether the continuation condition was satisfied.
Continuation does not confer a general licence
Regulation 5A(2) permits a qualifying provider that made the requisite complete application in time to continue its existing Virtual Asset Services while the application is determined, subject to the statutory conditions. That is a temporary statutory position; it should not be described to customers as a full licence. Regulation 6(4) separately states that an NOC is not itself a licence or authorisation to carry on Virtual Asset Services. The apparent tension disappears when the distinct legal bases are separated: the legacy operator's limited continuation arises, if at all, from Section 70 read with Regulation 5A, not from the NOC conferring general trading permission. A newly established applicant with an NOC cannot assume the same protection. Public communications should accurately describe the applicant's status and avoid implying that PVARA has endorsed its tokens, exchange or custody arrangements.
Existing services, not unapproved expansion
The statutory language concerns continuation of existing services. A provider that historically facilitated spot exchange cannot safely infer permission to launch leveraged derivatives, custody for third parties or a new token-issuance product during the transition. Schedule I to the Act and the Services Regulations distinguish licence categories; Regulation 5(3) confines a licence to the categories expressly specified. A transitional provider should likewise map what it was doing before commencement and compare that baseline with current activities. Material changes in customers, geography, settlement architecture, product types or asset control may alter the regulatory analysis even when the website branding remains unchanged. A sensible file records product screenshots and customer terms at the commencement date, the application date and the present date, with an explanation of each change.
Marketing and interim supervisory directions
Regulation 5A(2) includes a specific condition for marketing: a transitional applicant intending to conduct marketing before determination of its application must seek prior approval from the Authority. Regulation 5A(3) also allows proportionate written interim limits on onboarding, products, transaction volumes or custody arrangements where necessary to protect customers or market integrity. These restrictions are not mere administrative suggestions. A business may be able to service an existing customer under its transitional position yet be unable to advertise for new customers or introduce a higher-risk service. Management should maintain a register of every PVARA letter, approval, limitation and condition, identify its effective date, and ensure the marketing team and product engineers receive the same instructions. The absence of an immediate enforcement notice does not establish permission to exceed a written limit.
The missed deadline must be analysed without invented exemptions
For a provider that did not submit the required complete application by 5 September 2026, the starting position under Section 70(1) is cessation of the covered services. Neither the Act nor Regulation 5A supplies a general automatic extension merely because the operator has subsequently engaged advisers, incorporated a company or begun preparing a filing. Whether a particular provider can make a fresh NOC application is a separate question from whether it may continue operating in the meantime. Regulation 6 provides an NOC route, but Regulation 6(4) denies the NOC the effect of a service licence. Any request for clarification, reconsideration or a new regulatory pathway should therefore be accompanied by an accurate account of activities after the deadline and an operational plan that does not presume continuing permission. A formal exemption or written authorisation should never be inferred from silence.
Earlier NOCs and filings under the 2025 regime
The transition also involves an instrument-change problem. The NOC Regulations, 2025 were replaced for new applications when the notified Services and Activity Specific Regulations took effect on 21 August 2026. Regulation 7(7) nevertheless addresses certain existing applicants: holders of NOCs granted under the 2025 regime may proceed to a licence application under Regulation 7, while applicants who submitted NOC applications under that regime and remained in correspondence with PVARA are not required to make a fresh NOC filing under Regulations 5A and 6. The Authority may request additional information. That preservation of an application pathway should not be conflated with a universal operating exemption. The exact earlier NOC, correspondence and any express conditions must be checked before stating what activity was authorised or preserved.
Customer assets require a separate wind-down analysis
Cessation is not accomplished by disabling the “buy” button while leaving customers unable to withdraw assets. A provider facing a deadline problem should identify which entity controls private keys, where client fiat is held, whether client assets are segregated, and what contractual obligations govern withdrawal, return and dispute resolution. Section 70(2) and Regulation 5A place particular weight on customer asset protection and AML, CFT and CPF obligations during permitted continuation. A responsible cessation plan should preserve transaction histories, reconciliations, access logs and customer instructions, establish a verified withdrawal procedure and address unresolved complaints. The correct legal treatment of each balance depends on custody contracts, beneficial ownership, payment rails and any regulatory directions. Customer funds must not be treated as an available source of corporate working capital merely because operations are winding down.
Banking permission follows a different instrument
The State Bank of Pakistan's BPRD Circular Letter No. 10 of 2026, dated 14 April 2026, replaced the 2018 circular on virtual currencies and established conditional banking arrangements. It allows limited-purpose accounts for entities holding PVARA NOCs to complete licensing formalities, while accounts and client-money arrangements for licensed VASPs are subject to separate conditions. The circular does not say that a bank account regularises virtual-asset trading by an unlicensed operator. Banks must verify a VASP licence before onboarding for the licensed activity and remain responsible for their own AML and foreign-exchange obligations. Where a legacy provider has a banking relationship, the legal file should distinguish account-opening authority, permitted account uses, customer settlement flows and PVARA's separate authorisation. Treating these permissions as interchangeable creates risk for both institutions.
The evidence needed for a serious representation
A credible submission to PVARA should be built around a chronology rather than broad appeals to innovation or investment. The chronology should identify the entity and its ownership, commencement of each virtual-asset service, proof of operations immediately before 5 March 2026, the application record before 5 September 2026, any written acknowledgement of completeness, subsequent information requests, interim directions and the actual services provided after the deadline. Supporting exhibits should include contracts, onboarding records, marketing materials, wallet-control diagrams, customer-asset reconciliations and the proposed remediation or cessation plan. Where documents contradict the initial narrative, the contradiction should be disclosed and explained. This approach also enables advisers to separate legal entitlement from regulatory discretion, and to assess whether a reasoned request for directions is appropriate.
A workable conclusion for boards and counterparties
The transition cannot be reduced to the statement that “old exchanges may continue until licensed”. Only a qualifying existing provider with the required timely complete application and continuing compliance can rely on the statutory continuation mechanism, subject to written conditions and limits. A provider that missed the filing window should not represent a later NOC request as curing earlier unauthorised activity. Directors should obtain a current status opinion, approve any necessary cessation and asset-return controls, and keep customer communications accurate. Counterparties should ask for the actual PVARA instruments and a dated service map, not merely an application reference. The decisive questions are whether Section 70 applies to the person, whether Regulation 5A's filing condition was met, what services remain within the historic scope, and which binding directions now govern.
Regulatory status depends on the instrument.
Assess the operative permission, actual services and supporting evidence before taking a commercial step.
DISCUSS A MATTERGeneral legal information only; not advice on an individual transaction.