The Lahore High Court has formed a committee, comprising the State Bank of Pakistan, Federal Investigation Agency, Federal Bureau of Revenu, and other government institutions, to determine the legality of cryptocurrency in Pakistan.
At a hearing on Friday, the petitioner, Javed Kasuri, asked: “Do we have laws pertaining to crypto or digital currency in Pakistan? If we do what are they? Which court deals with crimes related to it? Do we go to a banking court or a normal one?”
Justice Jawad Hassan directed all these questions towards the government authorities. “How is cryptocurrency dealt with in the international market?” the court asked.
From the FBR, the court inquired how tax can be collected on the trade of digital currencies.
The hearing was later adjourned for an indefinite period of time. Last month, a complaint was filed by Muhammad Asghar, resident of Lahore, against Muhammad Zafar with the Faisalabad Cyber Crime Circle.
The former said that the accused invited the public at large through social media to invest in the digital currency “Bither Cash,” which turned out to be a fake cryptocurrency.
The petition claimed that the accused deprived the complainant of a heavy amount of money which was transferred to his accounts in the name of investment in the fake cryptocurrency.
An inquiry was conducted in the matter and subsequently, the FIA registered under sections 13 (making, obtaining, or supplying device for use in offense) and 14 (unauthorised use of identity information) of the Pakistan Electronic Crimes Act 2016 against the accused.
Zafar then filed a post-arrest bail petition with the Banking Crime Court, Lahore.
Cryptocurrency in Pakistan
Earlier this year, SBP Governor Raza Baqir said the central bank is studying cryptocurrencies and their potential for bringing transactions happening off the books into a regulatory framework.
In an interview with CNN’s Julia Chatterley, he said, “We are studying that [Central Bank Digital Currency] very carefully.”
He said that it will not only boost the central bank’s efforts for financial inclusion but also allow it to make progress in its fight towards anti-money laundering and countering terrorism financing.
However, the central bank has prohibited the transactions in digital currencies and declared them ‘illegal tender’.
In a circular issued to banks in 2018, SBP warned the banks that virtual currencies like Bitcoins, Lite Coin, Pakcoin, etc. are not legal tender issued or guaranteed by the Government of Pakistan.
The circular also said the SBP has not allowed any individual or entity to issue, sale, purchase, and exchange virtual currencies.
The central bank directed the banks to refrain from trading, holding, and investing in such currencies, and to report any such transactions to the Financial Monitoring Unit of the central bank.
