A PVARA licence can be taken away, and section 23 of the Virtual Assets Act 2026 is the provision that says how. It sets out five grounds PVARA can act on, a procedural right every licensee has before action is taken, and what happens to the company once a licence is actually revoked.
This piece works through the grounds, the process, and the immediate consequences of revocation — including a step most licensees do not expect: PVARA notifying SECP to start winding the company up.
What five grounds allow PVARA to vary, suspend or revoke a VASP licence?
PVARA may act, after written notice and a hearing, where a licensee has contravened the Act or any applicable law or licence condition; is insolvent or no longer fit and proper; has ceased to carry on the licensed virtual asset service; where action is necessary in the public interest, including consumer protection, market integrity or financial stability; or where the licence was obtained by fraud, misrepresentation or concealment. Section 23(1) sets these out directly:
“The Authority may, by way of written notice and after providing an opportunity of being heard, vary, suspend or revoke a license if it is found that— (a) the Licensee has contravened any provisions of this Act or any other applicable laws, or any terms or condition of its license; (b) the Licensee is insolvent or no longer satisfies the fit-and-proper criteria; (c) the Licensee has ceased to carry on the Virtual Asset Service for which it is licensed; or (d) such action is necessary or expedient in the public interest, including for the protection of consumers, the integrity of the market, or financial stability; or (e) the license was obtained by fraud, misrepresentation, or concealment of material facts.”
| Ground | What triggers it |
|---|---|
| (a) Contravention | Breach of the Act, any other applicable law, or a licence term or condition |
| (b) Insolvency / fit-and-proper failure | The licensee itself is insolvent, or no longer meets fit and proper standards |
| (c) Ceased operations | The licensee has stopped carrying on the licensed virtual asset service |
| (d) Public interest | Necessary for consumer protection, market integrity or financial stability |
| (e) Fraud on the application | The licence was obtained by fraud, misrepresentation or concealment |
Grounds (a) through (c) look backward at the licensee’s own conduct or condition. Ground (d) is broader by design — it does not require a specific breach, only that action is “necessary or expedient” for one of the three named interests. Ground (e) is the only one that reaches back to how the licence was obtained in the first place, rather than how the licensee has behaved since.
Does PVARA have to give notice and a hearing before acting?
Yes, on the plain text of section 23(1) — PVARA may act only “by way of written notice and after providing an opportunity of being heard.” This applies to all three actions the section authorises: variation, suspension and revocation. The Act does not describe the notice period, the format of the hearing, or how the licensee’s response is to be weighed; section 23(3) leaves the Authority free to prescribe “further procedures, timelines, and safeguards for variation, suspension, or revocation” by Regulations not present in the source material reviewed for this analysis. Where PVARA has not yet published that procedural detail, that gap is stated here rather than filled in from assumption.
This hearing right is a general procedural floor under section 23, distinct from the Act’s emergency intervention power. Section 60 lets PVARA suspend specified virtual asset services or freeze related assets for up to thirty days in response to a systemic threat, market manipulation, fraud or a cybersecurity breach — without the section 23 notice-and-hearing sequence attaching to that emergency action specifically.
What is the difference between “variation” and “suspension” or “revocation”?
The Act uses all three words in section 23(1) without separately defining them, but their ordinary meaning does the work. Variation changes the terms of an existing licence — for example, narrowing the Schedule I services a licensee may perform — without ending it. Suspension pauses the licence for a period, after which it may resume. Revocation ends the licence outright. Section 21(3) confirms a licence “shall remain in force unless suspended or revoked,” which frames revocation and suspension as the two states that actually stop a licence from being live, with variation sitting apart as an adjustment rather than an interruption.
Because PVARA can choose any of the three for the same underlying ground, the Act gives the Authority proportionality in practice even though it does not spell out a formal proportionality test in section 23 itself. A single reporting lapse and a pattern of fraud both fall under contravention in ground (a), but nothing in the text requires PVARA to treat them identically.
What happens immediately after a licence is revoked?
Two things, both stated in section 23(2). First, the licensee “shall immediately cease the provision of Virtual Asset Services” — there is no wind-down window written into the Act itself for continuing to serve existing customers after revocation takes effect. Second, PVARA “may notify the Securities and Exchange Commission of Pakistan to initiate winding-up or dissolution proceedings in accordance with the Companies Act, 2017.” This is worth being precise about: the Act frames the SECP referral as something PVARA “may” do, not something that happens automatically in every case, and the actual winding-up or dissolution process itself proceeds under the Companies Act, 2017 rather than under the Virtual Assets Act.
A revoked licensee’s obligations to customers do not disappear with the licence. Section 24 continues to require segregated holding of customer assets and imposes a fiduciary duty on the licensee, and nothing in section 23 suggests those duties lapse the moment a licence ends — an entity ceasing operations under section 23(2) is winding down customer exposure, not walking away from it.
Can a licensee appeal a variation, suspension or revocation?
Yes. Section 63 gives any virtual asset service provider, licensee or other person aggrieved by a PVARA order the right to appeal to the Virtual Assets Appellate Tribunal within thirty days of the date the order was communicated. Section 64(2) requires the Tribunal to decide the appeal within three months of it being filed, and section 64(3) gives the Tribunal the powers of a civil court for the purpose — including compelling attendance, production of documents and examination of witnesses. Section 64(5) treats a Tribunal decision as a civil court decree. Beyond the Tribunal, section 65 allows a further appeal to the Supreme Court of Pakistan within thirty days of the Tribunal’s order.
The thirty-day appeal window under section 63 runs from communication of the order, not from the underlying conduct that led to it — a licensee facing revocation should treat that date, not the date of the breach it relates to, as the clock that matters.
How does section 23 differ from PVARA’s emergency intervention powers?
Section 23 is the Act’s general-purpose mechanism for varying, suspending or revoking a licence on any of its five listed grounds, gated by notice and a hearing. Two other powers sit alongside it and are easy to confuse with it. Section 60 is narrower and faster: it lets PVARA suspend specified services or freeze assets for up to thirty days in a genuine emergency — systemic threat, market manipulation, fraud or a cybersecurity breach — without requiring the section 23 hearing process first. Section 61 is different again: it lets PVARA block or direct the blocking of online material connected to an unlicensed virtual asset service, which by definition applies to entities operating without any licence at all, not to a licensee whose existing licence is being varied, suspended or revoked under section 23.
A licensee assessing its own risk should treat these as three separate exposure points rather than one — routine contravention risk under section 23, acute emergency risk under section 60, and, for anyone operating without a licence in the first place, the blocking power under section 61.
Related reading
- PVARA Exchange License: Capital, Rules & Obligations 2026
- PVARA Transfer & Settlement License: Crypto Payments 2026
About this analysis
This analysis was prepared by the CoinConnect research desk from the Virtual Assets Act 2026 as passed by the National Assembly — principally section 23, read alongside sections 21, 24, 59, 60, 61 and Chapter 11 (sections 62 to 65) — as published. Where the Act defers procedural detail to Regulations not present in the source documents reviewed, that is stated in the text above rather than assumed.
Regulatory positions change and specific requirements should be verified against the current position published by the relevant authority before you act on them. This is information and analysis, not legal advice, and it does not create an advisory relationship. Take professional advice on your own circumstances.
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