LHC seeks report from federal govt on legality of cryptocurrency

LHC seeks report from federal govt on legality of cryptocurrency

LHC seeks report from federal govt on legality of cryptocurrency

A representative image of bitcoin. Photo: File

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LAHORE: The Lahore High Court (LHC) on Friday sought a report from the federal government on the legal status of cryptocurrency in the country.

The court wanted to know whether the State Bank of Pakistan (SBP) or Security Exchange Commission of Pakistan (SECP) has laid down any law, rules, regulations for regulating the digital currencies in the country.

As the hearing commenced, the counsel for SECP informed the court that the commission had not issued any license to conduct business through cryptocurrency. At this, the court-appointed financial expert Faisal Qureshi as amicus curiae and sought his assistance on the issue.

Read more: SHC forms commission to examine legality of cryptocurrency

Justice Jawad Hassan was hearing a writ petition challenging the jurisdiction of a special court for banking offences to hear a post-arrest bail petition of a suspect arrested by the FIA.

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The FIA lodged an FIR against suspect Dr Muhammad Zafar on the allegations of defrauding the public at large in the name of investment in cryptocurrency to the tune of over Rs260 million.

Advocate Javid Kasuri appeared on behalf of the petitioner and argued that the banking court had no jurisdiction to deal with the matter.

He explained that the special courts were established with the mandate to proceed with the trial of scheduled offences as per section 4 of Banks (Special Courts) Ordinance, 1984.

The counsel contended that the core point involved in the case related to the issuance of cryptocurrency by the suspect who was neither a bank nor authorized by the SBP or any bank, therefore, the judge of the special court had no authority to deal with the matter.

Read more: SHC summons SBP deputy governor, finance secretary

The court adjourned the hearing till December 17.

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Justice Hassan had already suspended the impugned proceedings pending before the special court till the final decision of the petition.

SHC forms commission to examine legality of cryptocurrency

Last month, the Sindh High Court formed a high-powered commission to look into the legality of the cryptocurrency business in the country and give its recommendations regarding making some law regulating or banning it.

A two-judge bench, headed by Justice Muhammad Karim Khan Agha, hearing the petition of social media activist Waqar Zaka issued the orders.

During the hearing, it transpired that currently, no legal framework exists to either allow or ban cryptocurrency business in the country.

The petitioner time and again pleaded with the court to decide about the legality of the cryptocurrency business in Pakistan and the action taken by the FIA against crypto miners and holders. However, Justice Agha observed that matter pertained to a policy decision that must be taken by the federal government.

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Read more: LHC issues notices on equivalence certificates issued for admission in medical college

He observed that what the court could do was to form a commission comprising of stakeholders which could hold discussions, deliberations and recommend to the government what should be done in this regard.

With the consent of the petitioner as well as representatives of the SBP, SECP and the finance ministry the bench formed the commission. It would be headed by either the governor or a deputy governor of the SBP and include senior officers from ministries of finance and information technology, SECP, Pakistan Telecommunication Authority and the petitioner as members.

With the consent of the petitioner and representatives of concerned government institutions, the bench directed the commission to hold its first meeting on October 25 and then have a meeting fortnightly and prepare and submit its report within three months.

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