The Peshawar High Court (PHC) has ordered the federal government of Pakistan to tackle the growing menace that is illegal crypto trading. According to reports, the court mandated that all unlawful cryptocurrency trading across the country must be eliminated, giving a two-month deadline to achieve the goal.
According to reports, the court wants Pakistan to first formulate a strategy to curb the issue across the country, including Khyber Pakhtunkhwa. It has also ordered the government to submit a comprehensive report to this effect. The ruling was delivered by a bench comprising Justice Syed Arshad and Justice Dr Khurshid Iqbal. The case was brought about by a petition submitted by Barrister Huzaifa Ahmad, who represented himself in court.
According to the petitioner, the term digital currency has evolved greatly in this technological era. He added that it means money can now be moved digitally, with no legal structure or legislation in place to govern such currencies. The federal government of Pakistan was represented by the Deputy Attorney General, Bilal Durrani, in the case.
Pakistani lawyer submits petition to regulate crypto trading
According to the petitioner, the State Bank of Pakistan had already ruled such internet commercial transactions as unlawful in a notification released by the bank in 2018. In the circular shared by the bank, digital assets were said to be unauthorized for the purchase or exchange of goods.
“Virtual Currencies (VCs) like Bitcoin, Litecoin, Pakcoin, OneCoin, DasCoin, Pay Diamond, etc., or Initial Coin Offerings (ICO) tokens are not legal tender, issued or guaranteed by the Government of Pakistan. SBP has not authorized or licensed any individual or entity for the issuance, sale, purchase, exchange or investment in any such Virtual Currencies/Coins/Tokens in Pakistan,” the statement said.
It also ordered all payment service providers and operators to refrain from providing any services to any individual or venture dealing in such services. “In view of the foregoing, all Banks/ DFIs/ Microfinance Banks and Payment System Operators (PSOs)/Payment Service Providers (PSPs) are advised to refrain from processing, using, trading, holding, transferring value, promoting, and investing in Virtual Currencies/Tokens,” it added.
However, according to the petitioner, individuals and firms are still using these various internet channels to carry out transactions. He mentioned that coaching centers and training academies in the K-P not only provide Bitcoin and Forex trading services, they also market these services on social media platforms, including TikTok, Facebook, and YouTube.
Peshawar High Court orders probe into illegal crypto trading
In his claims, the petitioner mentioned that operators and traders have been carrying out these activities online for a while, noting that they collect, withdraw, and freeze cash online. He also added that the right authorities have taken no actions against these activities despite knowing about them. He added that he has written to the relevant authorities over the last few years, but they have yet to respond to his letters or carry out the needed actions.
According to the laws of the Securities and Exchange Commission of Pakistan (SECP), firms that want to carry out activities like that need to first register under the securities exchange laws. However, those companies and training academies are not registered, even though they may be a source of income in terms of tax for the federal government. He also cautioned about the dangers of using digital assets for money laundering and terrorist financing.
The petitioner mentioned that these types of trade could severely undermine the national security of the country. “Therefore, it is the responsibility of the federal and provincial governments to ban such illegal businesses and to shut down the institutions and academies involved in crypto and forex trading avenues to carry out terrorism, gambling, and other anti-state activities,” he said.
He requested that the court order the government to pass legislation to prohibit such illegal companies and force the Federal Investigation Agency and other relevant agencies to act. The deputy attorney general, representing the federal government, told the court that the government is in the process of formulating legislation and needs about a month to complete it.
In response, the bench gave the government two months, with the court later postponing the hearing, while directing the federal government to provide a policy within the period.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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By Nermeen Nabil Khear 