Someone in your family has probably shown you a WhatsApp video about forex. Earn dollars from your phone. Double your money in a week. It sounds good, and that is exactly why it is dangerous. So what is the real answer? Is forex trading legal in Pakistan?
The short answer: forex is legal in Pakistan, but only through banks and exchange companies licensed by the State Bank of Pakistan. Trading on the offshore platforms you see advertised online is not legal, and you can be prosecuted for it. Let me explain where the line is. For more plain language guides on Pakistani law, browse the Lexiber blog.
What the law actually says
Foreign exchange in Pakistan is controlled by one law. The Foreign Exchange Regulation Act, 1947, or FERA. Under it, only people authorised by the State Bank can deal in foreign exchange.
That means banks. And it means exchange companies with a licence from the SBP. Anyone else, including a website sitting in another country, has no legal right to run a forex business for people in Pakistan.
Dealing in foreign exchange without authorisation is an offence under Section 23 of FERA. The punishment can be imprisonment of up to five years, or a fine, or both. Pakistani courts have applied this provision in cases of unauthorised currency dealing.
What the SBP said about OctaFX and Easy Forex
In May 2022 the State Bank issued a clear warning. It named two popular offshore platforms, OctaFX and Easy Forex, and said they were illegal in Pakistan.
The SBP said these platforms are regulated neither by the central bank nor by the Securities and Exchange Commission of Pakistan. It listed the products they offer, like margin trading and contracts for difference. And it warned that anyone who sends money to such platforms can be prosecuted under FERA.
The order to banks was simple. Stop payments to these platforms through every payment channel you control.
The fake forex apps that stole money
Then there are the outright scams. The Financial Monitoring Unit of Pakistan, the agency that tracks suspicious money, published a report about three apps: P Trade, A Trade and G Trade.
These apps promised small deposits and huge profits. Put in 500 rupees, get 40,000 rupees back in two or three days. The apps even used a fake picture of the Prime Minister to look official.
When people deposited money, it went into personal bank accounts, not company accounts. The FMU examined 30 such accounts with combined deposits of over 550 million rupees. The account holders were all in their early thirties and from the same region. That is the classic pattern of benami accounts, opened to hide who really owns the money.
The FMU shared its findings with the Federal Investigation Agency. The people behind the apps were put under investigation.
What is legal then
Forex is legal when it goes through the authorised system.
You can exchange currency at a bank or a licensed exchange company. You can send money abroad through a bank for a remittance or a payment. You can hold a foreign currency account at a scheduled bank. These are all normal, legal uses of foreign exchange.
What is not legal is margin trading on an unregulated offshore platform. The SBP has not licensed any online forex broker for retail trading in Pakistan. If a platform is not a bank and not an SBP licensed exchange company, it is operating outside the law.
How to check before you trade
- Ask if the platform is a scheduled bank or an exchange company licensed by the SBP. If it is neither, stop.
- Check the SBP website for the list of licensed exchange companies.
- Treat any promise of guaranteed returns as a lie. Real trading has no guarantees.
- Never send money to a personal bank account. That is how the P Trade scam worked.
- If you already sent money and the app is refusing to pay, complain to the FIA cybercrime wing and to your bank in writing.
What this means for you
Forex trading is not banned in Pakistan. It is regulated. The line is simple. Banks and licensed exchange companies are legal. Offshore online platforms are not.
If you want to trade currencies, use the banking system. If someone promises easy dollars through an app, remember the 550 million rupees that flowed into 30 personal accounts. That money is gone.
Crypto is a separate and more complicated story. If you want to understand it, read our guides on whether Binance is legal in Pakistan and whether Pi Network is legal. Both explain where the law draws its lines. And for the wider picture, visit Lexiber.
Do you have a specific question about forex, crypto or a frozen account? Ask Lexiber free in English or Urdu. It shows you the exact section behind every answer.
