PVARA's Code of Conduct and Public Servant Status Explained

A regulator that licenses virtual asset businesses is, by definition, surrounded by people who might personally profit from what they know. The Virtual Assets Act 2026 addresses that risk directly. Section 16 imposes a statutory duty of integrity on everyone inside the Pakistan Virtual Assets Regulatory Authority (PVARA), and requires a formal Code of Conduct covering personal trading and post-tenure restrictions. Section 69 goes further and deems every one of those same people a public servant under the Pakistan Penal Code, 1860.

Together, these two sections tell you something specific: PVARA officials are not merely subject to internal HR policy if they misuse their position. They are subject to criminal liability under the Penal Code’s public-servant provisions, on top of removal from office and disciplinary action under the Act itself.

Who does PVARA’s Code of Conduct apply to?

Section 16(1) applies to a wide list of people by name: “the Chairperson, Members of the Authority including ex-officio Members, Managing Director, officers and employees of the Authority.” This covers the full governance structure set out in section 7 — the Chairperson, the Secretary of Finance, the Secretary of Law and Justice, the Governor of the State Bank of Pakistan, the Chairperson of the Securities and Exchange Commission of Pakistan (SECP), the Chairman of the National AML-CFT Authority, the Chairperson of the Pakistan Digital Authority, and the two independent directors — plus the Managing Director appointed under section 12, and every officer and employee below them.

The phrase “including ex-officio Members” is deliberate. Some members of PVARA’s governing body sit there because of another office they hold — the State Bank Governor, for instance — rather than through a dedicated appointment. Section 16(1) makes clear that ex-officio status does not exempt anyone from the same integrity duty.

What behavioural standard does section 16(1) set directly?

Section 16(1) sets the baseline standard without waiting for further Regulations: everyone covered “shall, in the performance of their functions, act with integrity, impartiality, confidentiality and in good faith, and shall avoid any conflict of interest, whether direct or indirect.”

“The Chairperson, Members of the Authority including ex-officio Members, Managing Director, officers and employees of the Authority, shall, in the performance of their functions, act with integrity, impartiality, confidentiality and in good faith, and shall avoid any conflict of interest, whether direct or indirect.”

This is a standalone legal obligation, not merely an aspiration to be filled in later — it applies from commencement of the Act, independent of whether the detailed Code of Conduct under section 16(2) has yet been published. The word “indirect” is significant: a conflict routed through a family member, a business partner or a related entity falls inside the duty just as much as a direct personal interest.

What must the prescribed Code of Conduct under section 16(2) cover?

Section 16(2) requires PVARA to go further and “prescribe, by Regulations, a Code of Conduct applicable to the Chairperson, Members of the Authority, Managing Director, officers and employees of the Authority, including provisions relating to disclosure of interests, conflict management, restrictions on personal trading in Virtual Assets, confidentiality, and post-tenure obligations.”

Five specific elements are named:

• disclosure of interests;
• conflict management;
• restrictions on personal trading in virtual assets;
• confidentiality; and
• post-tenure obligations.

The Act names these five categories as things the Code “including” must cover, which reads as a floor rather than an exhaustive list — PVARA may add further provisions in the actual Regulations. As at the date of this analysis, the detailed Code of Conduct Regulations contemplated by section 16(2) were not among the source documents reviewed for this piece; only the statutory requirement to produce one is confirmed.

Can a PVARA official personally trade virtual assets?

Section 16(2) names “restrictions on personal trading in Virtual Assets” as a mandatory element of the Code of Conduct, which means some form of restriction is required by the Act — the precise scope, whether an outright ban or a disclosure-and-cooling-off regime, is left to the Regulations that give effect to it. This provision sits close to the Act’s insider-trading prohibitions elsewhere: section 52 separately bars anyone from using inside information to trade virtual assets, recommending trades based on it, or unlawfully disclosing it, with criminal penalties under section 54(3).

Our reading is that section 16(2)’s personal-trading restriction and section 52’s insider-trading prohibition are complementary rather than duplicative — section 52 addresses inside information generally, while section 16(2) specifically targets the position of PVARA staff, who by the nature of their role have privileged visibility into licensing decisions, enforcement actions and market-moving regulatory changes before the public does.

What happens if a PVARA official breaks the Code of Conduct?

Section 16(3) sets a firm consequence: “Any violation of the provisions of this section or the Code of Conduct prescribed thereunder shall constitute misconduct and shall result in removal from office or service, as the case may be, and the initiation of disciplinary proceedings.”

Two things happen simultaneously — removal from office or service, and the start of disciplinary proceedings. The Act does not describe removal and disciplinary proceedings as alternative outcomes; both follow automatically once a violation is established. This is a stricter standard than a typical employment misconduct clause, which might allow for lesser sanctions such as a warning or a demotion. For the Chairperson specifically, section 11(3) provides that removal before the expiry of term requires “gross misconduct or incapacity following a show cause notice and opportunity to be heard” — so a Code of Conduct breach attributed to the Chairperson would need to meet that separate procedural bar as well.

What does “public servant” status under section 69 mean?

Section 69 extends the consequences of misconduct beyond internal removal. It states: “The Chairperson, Managing Director, members, staff, experts, consultants, advisers, other officers and employees of the Authority shall be deemed to be public servants within the meaning of section 21 of the Pakistan Penal Code: 1860 (XLV of 1860).”

“The Chairperson, Managing Director, members, staff, experts, consultants, advisers, other officers and employees of the Authority shall be deemed to be public servants within the meaning of section 21 of the Pakistan Penal Code: 1860 (XLV of 1860).”

This is a much wider list than section 16(1)’s Code of Conduct coverage — section 69 explicitly adds “experts, consultants, advisers” to the Chairperson, members, staff and employees already named. Deeming someone a public servant under section 21 of the Pakistan Penal Code, 1860 (PPC) exposes them to the Penal Code’s dedicated offences for public servants — provisions covering matters such as bribery, corruption, disobedience of the law by a public servant, and breach of trust in that capacity — in addition to whatever removal or disciplinary process the Act itself imposes under section 16(3). The Act does not itself list which PPC offences apply; it simply confers the status that brings those provisions into play. Verify the current scope of PPC public-servant liability with qualified counsel rather than relying on this summary for a specific matter.

Why does this matter to a licensee or applicant?

For a company going through the licensing framework or a no objection certificate application, sections 16 and 69 are not abstract governance clauses — they set the standard you are entitled to expect from the officials reviewing your application. A conflict of interest, a leak of confidential fit and proper information about your key individuals, or personal trading on inside knowledge of your pending licensing regime status by a PVARA official is not merely an internal matter — it is misconduct under section 16(3) and potentially a criminal matter under the PPC via section 69.

It also has a bearing on confidentiality expectations. Section 16(2) requires the Code of Conduct to address confidentiality directly, which reinforces the general expectation that sensitive commercial information submitted as part of an AML framework or a controller disclosure is handled under a statutory duty, not just good practice. If you believe a PVARA official has acted outside these standards, that is a matter for a formal complaint and, where warranted, referral to the appropriate authorities — not something to raise informally within the application process itself.

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 sections 16 and 69, with cross-references to sections 7, 11, 12, 52 and 54 — read as published. Where practice is not yet settled or guidance has not been issued, that is stated in the text above.

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.