Not every enforcement action under the Virtual Assets Act 2026 requires a criminal trial. Section 59 gives the Pakistan Virtual Asset Regulatory Authority a separate, faster track: administrative sanctions, imposed directly by the Authority once it is satisfied a contravention has occurred, without first going through the Special Court and prosecution process described elsewhere in the Act.
This is the track most licensees are likely to encounter in practice. Criminal prosecution under sections 54, 57 and 58 requires an investigation, a warrant, a written report, and a trial before a Special Court. Administrative sanctions under section 59 do not — the Authority itself makes the finding and imposes the consequence, subject to the appeal rights the Act separately provides.
Understanding the five sanctions available, and the two separate financial penalty powers the section contains, is essential for any Key Individual responsible for compliance at a licensed virtual asset service provider.
What triggers an administrative sanction under section 59?
Where the Authority is satisfied that a person has contravened any provision of the Act, or any Rules, Regulations, directions, circulars or other regulatory requirements made under it, the Authority may impose one or more of five sanctions. Section 59(1) sets the trigger this way — a wide standard covering not only the Act itself but the entire body of subordinate Rules, Regulations, directions and circulars issued under it.
The word “satisfied” is doing real work here. The Act does not set out a formal evidentiary standard or hearing process within section 59 itself for reaching that satisfaction, unlike section 23, which explicitly requires written notice and an opportunity to be heard before a licence is varied, suspended or revoked. Where a licence action is the sanction being considered, section 23’s procedural safeguards would apply on top of section 59; for the other four sanctions, the Act’s text in section 59 does not itself spell out an equivalent hearing requirement.
What are the five sanctions PVARA can impose?
Section 59(1) lists five sanctions, which the Authority may impose singly or in combination:
| Sanction | What it does |
|---|---|
| Written reprimand or public censure | A formal, recorded rebuke; “public” censure implies disclosure beyond the licensee itself |
| Directive to cease or remedy | An order requiring the person to stop the contravening conduct or fix it |
| Financial penalty | Up to the maximum amount prescribed by the Rules |
| Suspend or revoke a licence | Removes or restricts the person’s authority to operate under the Act |
| Disqualification | Bars the person from holding office or a position of responsibility at a licensee |
These sanctions are not mutually exclusive. The Authority may impose “one or more” of them for a single contravention, so a licence suspension and a financial penalty, for example, can both follow from the same finding.
Do these sanctions apply to Issuers as well as Virtual Asset Service Providers?
Yes. Where the Authority is satisfied that an Issuer has contravened the Act or any Regulations made under it, it may impose the same sanctions under section 59(1), with such modifications as are appropriate to an Issuer rather than a service provider. Section 59(2) extends the sanction regime this way, without listing what those modifications are — the Act leaves that judgement to the Authority, applying the same five-sanction framework to the different circumstances of an Issuer rather than a licensed service provider.
Section 59(3) adds a further extension: without prejudice to the sanctions already described, where a virtual asset service provider or Issuer contravenes any other law applicable in Pakistan — not only the Virtual Assets Act itself — the Authority may impose administrative sanctions as it deems appropriate, in accordance with Regulations. This gives the Authority a route to sanction conduct that breaches, for example, tax law or company law, where that conduct also touches a licensee’s fitness to operate under this Act.
How large a financial penalty can PVARA impose?
Two separate financial-penalty powers sit in section 59, and they should not be conflated. Section 59(1)(c) allows a financial penalty “up to the maximum amount prescribed by the Rules” as one of the five listed sanctions — an amount the Act itself does not fix, leaving it to future Rules. Separately, section 59(4) gives the Authority a standalone power to impose a fine up to twenty-five million Rupees for any contravention of the provisions of the Act.
“The Authority may impose a fine up to twenty-five million Rupees for any contravention of the provisions of this Act.”
The Act does not explain how the Rules-prescribed penalty under 59(1)(c) and the twenty-five-million-Rupee cap under 59(4) relate to each other — whether 59(4) sets an outer statutory ceiling that any Rules-prescribed maximum under 59(1)(c) must sit within, or whether they are two distinct powers a reader should treat separately until the relevant Rules are published. This is not settled by the text of the Act alone.
What role does the court play alongside an administrative sanction?
The court may order restitution, disgorgement of profits, or such other relief as it deems appropriate. Section 59(5) gives courts this power, sitting alongside — rather than instead of — the Authority’s own administrative sanctions. This confirms that the administrative track under section 59 and the judicial track available through prosecution are not mutually exclusive: a contravention can result in an Authority-imposed sanction, a court-ordered remedy such as restitution or disgorgement, or both, depending on how the matter proceeds.
How does an administrative sanction differ from a criminal conviction?
An administrative sanction under section 59 is imposed by the Authority itself, based on its own satisfaction that a contravention occurred, and does not require the investigation, warrant and Special Court process that a criminal conviction under section 54 requires. It is faster, and it does not carry the imprisonment exposure a criminal offence does — but a licence suspension, revocation or disqualification can be just as commercially terminal for a virtual asset business as a criminal fine.
For a licensee, the practical implication is that compliance failures do not need to rise to the level of a criminal offence before they carry serious consequences. The Authority’s section 59 powers reach any contravention of the Act, Rules, Regulations, directions or circulars — a considerably lower and broader bar than the specific criminal offences listed at section 54.
Can a section 59 sanction be appealed?
Yes. A person aggrieved by an order of the Authority — which includes an administrative sanction imposed under section 59 — may appeal to the Virtual Assets Appellate Tribunal within thirty days of the date the order was communicated, under section 63. The Tribunal is established under section 62, sits with a presiding officer and two members, one a technical expert and one a financial expert, and must decide the appeal within three months of its presentation, under section 64(2). A further appeal from the Tribunal’s decision lies to the Supreme Court of Pakistan, within thirty days, under section 65.
This appeal route means a section 59 sanction is not the final word simply because the Authority reached it without a court hearing at first instance. The Tribunal is deemed a civil court for the purpose of deciding the appeal, with powers to compel attendance, production of documents and examination of witnesses under section 64(3), and its determinations are treated as decrees of a civil court under section 64(5). A licensee facing a section 59 sanction should treat the thirty-day appeal window as a hard deadline, since the Act does not provide for an extension of time to file.
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 23, 54, 57, 58, 59, 62, 63, 64 and 65 — read as published. Where the Act does not resolve how two provisions interact, such as the two financial-penalty powers in section 59, 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.
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