Peshawar High Court Orders Pakistan's Federal Government to Crack Down on Illegal Crypto Trading

The Peshawar High Court (PHC) has ordered the federal government of Pakistan to tackle the growing menace that is illegal crypto trading.

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. A bench, comprising Justice Syed Arshad and Justice Dr Khurshid Iqbal, delivered the ruling on Thursday.

The case was brought about by a petition submitted by Barrister Huzaifa Ahmad, who represented himself in court. Meanwhile, the Deputy Attorney General, Bilal Durrani, appeared for the federal government.

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 State Bank of Pakistan (SBP) had already ruled such internet commercial transactions as unlawful in a notification.

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 centres and training academies in Khyber Pakhtunkhwa 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.