Pakistan

Important news for cryptocurrency investors in Pakistan

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Justice Jawad Hassan of Lahore High Court has directed the federal government to apprise it whether the State Bank of Pakistan (SBP) has laid down any law, rules, or regulations for regulating cryptocurrency (a digital payment system that doesn’t rely on banks to verify transactions) in the country.

Judge also directed to an additional attorney general (AAG) to inform whether the federal investigation agency (FIA) has taken any action in terms of section 14 of the Prevention of Electronic Crimes Act, 2016 against the persons dealing with crypto miners and traders. AAG is also to reply whether the FIA has the jurisdiction to investigate such matter and what action or step has been taken under the scheduled offence of FIA falling under its jurisdiction.

The judge raised these questions while admitting a petition for a regular hearing challenging the jurisdiction of a special court for banking offences to hear a post-arrest bail petition by a suspect arrested by the FIA. The judge postponed further hearings till October 29 as the federal government law officers sought time to seek instructions from the relevant departments.

Cryptocurrency

Judge also suspended the impugned proceedings pending before the special court till the final decision of the petition.

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Earlier the FIA had lodged a case against one 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 and a banking court was trying him on these charges. The accused counsel said that the banking court had no jurisdiction to hold a trial.

Counsel submitted that the special courts were established with the mandate to proceed with the trial of scheduled offences as per section 4 of the Banks (Special Courts) Ordinance, 1984 and not to try the petitioner. He said 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.

He asserted that a special court judge had no jurisdiction to deal with the matter. He requested to declare the trial of the petitioner null and void.

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