BITCOIN, BOMBS & TRUMP

Pakistan launders its past. Trump writes a blank cheque

1. PAKISTAN’S CRYPTO PIVOT: WASHING ITS PAST WITH TRUMP’S FUTURE

Pakistan has found a new backdoor into Washington—cryptocurrency. By aligning itself with the Trump administration’s newly deregulated crypto ecosystem, Islamabad is hoping to rewrite its global image and escape the weight of its terror-linked past.

At the center of this pivot is World Liberty Financial (WLF)—a crypto venture partly owned by the Trump family—and Chang Peng Zhao of Binance fame, both of whom have faced regulatory scrutiny. With help from these players, Pakistan’s Crypto Council is pushing Stablecoins, infrastructure tokens, and large-scale digital asset initiatives—all under the cloak of “financial innovation.”

But behind the blockchain buzz lies a deeper concern.

Trump’s deregulation isn’t just economic policy—it’s political absolution.

Trump has dismantled Biden-era crypto enforcement, sidelined regulators, and shut down the Consumer Financial Protection Bureau (CFPB)—once created to shield Americans after the 2008 financial crash. At the recent Bitcoin 2025 summit in Las Vegas, White House crypto czar David Sacks called CFPB a “goon squad” that terrorized crypto companies.”

In place of guardrails, Trump has opened floodgates.

And Pakistan is racing through.

Its crypto czar, Bilal Bin Saqib, played a key role in roping in Zhao. The goal is clear: leverage U.S. deregulation to gain IMF flexibility, FATF legitimacy, and eventually build a crypto-financed economy insulated from Western scrutiny.

There’s already a precedent: El Salvador. Its President Nayib Bukele, who staked 15% of his country’s GDP on bitcoin, faced IMF pushback—until Trump intervened. Now, Bukele has secured a $1.4 billion IMF package, bypassing conditionality on crypto divestment.

Pakistan wants the same playbook.

In fact, on May 9, while India’s Op Sindoor was underway, Pakistan quietly secured a GENIUS Bill–based crypto compliance nod. It's now counting on Trump’s second term to override fresh objections, normalize its crypto assets, and shift away from IMF dependence by accumulating bitcoin-backed reserves.

But here lies India’s core concern:

At the very moment Pakistan seeks to rebrand itself through crypto, it remains a terror-sponsoring state. A state now aligning with a Washington that no longer regulates—but enables.

Crypto integration is not inherently dangerous.But crypto without enforcement is not innovation—it’s infrastructure for abuse.

And if Trump’s version of deregulation becomes the global template, then for countries like Pakistan, it may no longer matter how terror is financed—only that it’s called “blockchain-compliant.”

2. LAX AML = LOOPHOLES FOR TERROR NETWORKS

The Economic Times warns that Pakistan’s crypto realignment risks creating a financial grey zone—“opening doors for previously scrutinized figures” Crypto is becoming a backdoor for shady players to return with legitimacy, potentially shielding illicit flows from global oversight.

With its anti-money laundering (AML) laws still porous, and the State Bank’s crypto ban more cosmetic than real, Pakistan offers the perfect environment for terror-linked transactions to hide in plain sight. For India, that’s not just a regulatory lapse—it’s a national security threat.

3. CRYPTO AS COVERT WEAPON

The above discussion makes it clear: crypto is no longer just a financial tool—it’s a battlefield asset. It enables untraceable fund flows that slip past FATF and IMF scrutiny, allowing militant groups and proxy networks to operate in the shadows.

From ISIS-linked operatives to far-right extremists, global terror outfits are already using crypto to finance arms, training, and recruitment. For India, the danger is immediate—this isn't just a loophole; it’s a live wire running straight through our national security architecture.

4. THE PAKISTAN – TERROR NEXUS

Pakistan is still flagged by FATF for terror financing and remains under enhanced scrutiny for shielding militant networks. Now, by embracing crypto under Trump-era deregulation and partnering with globally tainted players, it’s building something far more dangerous—a digital pipeline for terror funding. No transparency, no safeguards—just a clean-looking corridor for dirty money.

For India, this isn’t a future threat. It’s a live channel that could bankroll the next proxy attack.

India can’t afford to watch this unfold in silence. New Delhi must push for stricter FATF enforcement, demand international audit trails on cross-border crypto flows, and build a domestic surveillance framework that flags blockchain-based terror finance in real time. Most importantly, India must call out the hypocrisy—where the same powers that once lectured us on compliance are now enabling our adversaries through deregulated digital finance.

BOTTOM LINE

This isn’t a financial revolution. It’s a digital detour for terror. With Trump dismantling guardrails and Pakistan rushing to monetize its militancy, crypto is on the verge of becoming the cleanest way to fund the darkest networks. What was sold as innovation now risks legitimizing insurgency.

WHAT SHOULD INDIA DO?

New Delhi must move fast—flag this alliance at FATF, push for global crypto accountability standards, and deploy tech-led counter-finance tracking. If Pakistan is allowed to launder its image through blockchain, India must expose the code beneath the cover.