By Malik Abbas, Founder & CEO, CoinConnect
I've now watched enough crypto companies attempt to enter Pakistan to tell you something uncomfortable: most failed entries fail for the same seven reasons, and underneath all seven sits a single root cause. None of these companies were stupid. Many were well-funded, well-run, and successful elsewhere. They failed anyway — and they failed predictably. So let me do something genuinely useful for you: walk you through the seven ways this goes wrong, as a postmortem, so you can see them coming. And then I'll tell you the one thing every failed entry had in common, because once you see it, you'll understand exactly what to protect against.
I'm not writing this to frighten you. I'm writing it because every one of these failures is avoidable — but only if you recognize it before it happens, not after. After is when companies call me. Before is when they should have.
Reason 1: They treated it as a paperwork exercise instead of a campaign
This is the original sin, and almost every other failure grows from it. A capable company looks at PVARA, sees "licensing," and mentally files it under "regulatory paperwork we've done before." That single misclassification sets everything else in motion.
Because entering Pakistan is not paperwork. It's the coordination of four or five regulators at once — PVARA, SECP, the FBR, the FMU, and the State Bank — while choosing correctly among four entry routes and ten license categories, structuring capital, standing up real compliance systems, and putting your executives through a fit-and-proper examination. That's a campaign, with sequencing, dependencies, and lead times. Companies that treat it as paperwork under-resource it, under-plan it, and assign it to someone part-time. They discover the true scale of it only when they're already deep inside, and by then they've lost the time they needed to do it right. The lesson: respect the size of what you're actually undertaking before you start, not after.
Reason 2: They chose the wrong entry route or the wrong license category
Pakistan's framework gives you four ways in — the NOC, the Regulatory Sandbox, the No-Action Relief Letter under Section 45, and the full VASP License — and ten license categories, each with its own capital requirement and constraints. That flexibility is a gift to companies who understand it and a trap for those who don't.
I've seen companies build a technically excellent application for the wrong route — pursuing a full license when a sandbox entry would have let them test under reduced capital, or applying under a category that didn't match how their business actually operates. When the regulator pushes back, it's not because the work was sloppy; it's because the work was aimed at the wrong target. And fixing a wrong-route or wrong-category decision is structural, not cosmetic — it can mean restarting large parts of the process. The lesson: the route and category decision is the most consequential one you'll make, and it has to be made by someone who understands all four routes and all ten categories well enough to match them to your specific model. Get this wrong at the start and everything built on top of it is built on sand.
Reason 3: They misjudged the capital — and lost their own board
The capital figures under the draft Schedule I run from PKR 25 million for an Advisory license to PKR 1 billion for an Exchange or a token issuer. These numbers are widely misreported online, and companies routinely arrive having budgeted for the wrong one.
Here's how this failure actually plays out, and it's rarely the way people expect. The company doesn't fail because it can't meet the capital — it fails because it misjudged it and lost internal confidence. A team that told its board "this will need a few million rupees" and then discovers an Exchange license carries a PKR 1 billion paid-up capital expectation now has a credibility crisis at the leadership table. And the cruel part is that the capital is recoverable — it's share capital held in their own company, not a fee — and the sandbox can reduce it proportionately so they can test before committing the full figure. Someone who understood the framework would have structured the entry to lock up far less, far later. The company that misjudged it never gets to that insight, because by the time they learn the real number, the board has already soured on the whole plan. The lesson: price the capital correctly and structure it to lock up as little as possible — before you set any expectations you'll have to walk back.
Reason 4: They built compliance on paper instead of in practice
Every VASP must stand up a genuine AML/CFT program — customer due diligence, ongoing monitoring, sanctions and PEP screening, the FATF Travel Rule, FMU registration on goAML, record-keeping — plus custody safeguards and an independent security audit. The failure here is subtle and deadly: the company builds compliance that describes the right things without doing them.
A regulator's examiner is trained to tell the difference. Is your transaction monitoring real or theoretical? Did you genuinely implement the Travel Rule, or write a paragraph about it? Is goAML a working capability or a box you ticked? When the gap between described and built gets exposed, it doesn't just create a deficiency — it tells the regulator you didn't really understand the requirements, and that impression colors everything afterward. Worse, in a FATF-aligned regime, compliance failures can expose your Key Individuals personally. The lesson: build your compliance architecture against the actual handbooks, as working systems, not as documentation — because the regulator will test the substance, not the binder.
Reason 5: They didn't pre-clear their people
PVARA assesses the people behind a VASP — directors, CEO, compliance officer, significant shareholders, ultimate beneficial owners — against a fit-and-proper standard covering integrity, competence, and financial soundness. Foreign Key Individuals typically need police-clearance certificates from each country of residence, properly notarized and apostilled.
This is where confident applications stall, because the people problem is invisible until it isn't. A beneficial-ownership structure triggers enhanced scrutiny no one anticipated. A director's documentation can't be apostilled in the timeframe the company assumed. A Key Individual's history surfaces a question that takes weeks to resolve. These are obvious in hindsight and invisible in advance — unless someone pre-cleared the people and started the slow documentation early. The lesson: vet and prepare your people first, because the costliest delays are the ones rooted in documents that take eight weeks to obtain and that you didn't start requesting until week thirty.
Reason 6: They treated banking as the last step
I'm going to devote an entire article to this, because it's the single most common operational failure — but it belongs on this list. Companies sequence their entry as "get the license, then open the bank account." That sequencing is exactly what kills them.
Banking appetite in Pakistan is real but conditional, and it has to be engineered into the plan from the very beginning. A company can do everything right on the license and then discover, after spending months and serious capital, that no bank will open its account — because the AML program wasn't built to banking standards, or there's no credible resident signatory, or banking was simply never worked in parallel. A crypto business with no rupee rail is not a business; it's an expensive certificate. The lesson: banking is not the step after the license. It's a workstream that runs alongside the license from day one, or it becomes the wall everything crashes into.
Reason 7: They had no real on-ground execution — they tried to run Pakistan from a spreadsheet abroad
This last one is the most underestimated, and it's the one that separates companies that get licensed from companies that actually succeed. Many foreign entrants try to run their Pakistan entry remotely — managing it from headquarters, treating it as a checklist to be administered from afar, with no genuine local presence, no relationships, and no understanding of how this market actually works on the ground.
It doesn't work. Banking relationships are built in person. Regulatory credibility is built through local seriousness. And — critically — even a successful license means nothing if you can't then launch: acquire users, build trust in a market with its own culture and channels, and convert a permit into a living business. Companies that have no on-ground execution capability either stall during the process for lack of local presence, or graduate to a license and then launch into silence, with no engine to turn approval into customers. The lesson: entering Pakistan is not only a regulatory project; it's a market-entry project, and market entry requires people on the ground who understand both the regulator and the market.
The one thing all seven have in common
Now here's the synthesis, and it's the whole point of this article. Look back at those seven reasons. Underestimating the scale. Choosing the wrong route. Misjudging capital. Paper compliance. Unprepared people. Banking as an afterthought. No on-ground execution.
Every single one of them traces to the same root cause: the company had no one on its side who had actually done this before, in this specific market, with both the regulatory depth and the operator's instinct to see what was coming.
That's it. That's the common thread. The failures weren't caused by a lack of intelligence, effort, or funding. They were caused by a lack of the right kind of experience on the company's side of the table. Every one of those seven failures is exactly what an experienced guide catches before it happens. The route decision, the capital structuring, the substance of the compliance build, the early people-clearing, the parallel banking work, the on-ground launch capability — these are precisely the things you cannot learn from reading the regulations once, and precisely the things that someone who has navigated this market repeatedly carries in their head as second nature.
This is why I'm so direct with founders. The question isn't whether you're capable — you clearly are, or you wouldn't be considering a market this ambitious. The question is whether you have, on your side, someone who has walked this exact path and knows where the holes are. Because the regulator won't warn you. The shortcut will sink you. And the seven failure modes are waiting, in order, for anyone who walks in without that experience.
At CoinConnect, our entire reason for existing is to be that experience on your side — the operator's instinct plus the regulatory depth plus the on-ground presence, pointed at making sure none of these seven failures ever reaches you. I won't promise you the regulator's signature; no one honest can. But I will promise you that we know exactly where companies fail here, because we've watched it happen and we've built our whole process to prevent it.
If you want to know which of these seven your current plan is most exposed to, that's the first thing I'd map with you — and it costs you nothing to find out.
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Keep reading: How Long Does a PVARA License Really Take Without Expert Help? The Honest Answer (Article 5).