PESHAWAR: Peshawar High Court On Wednesday sought replies from federal and Khyber Pakhtunkhwa governments to a petition challenging crypto currency and other digital currency trading in the country.

A bench consisting of Justice Syed Mohammad Attique Shah and Justice Sahibzada Asadullah issued the order after preliminary hearing of the petition filed by Barrister Huzaifa Ahmad, who requested the court to declare as illegal and against a notification of State Bank of Pakistan the trading in crypto currency and other digital currencies in the country.

The petitioner sought directives of the court for respondents including federal and provincial governments to impose a complete ban on crypto currency and digital foreign exchange trading till there was a law governing it; to monitor and draft a policy pertaining to those bank accounts through which funding in crypto and digital foreign exchange trading was done; and, to take strict legal action against those companies, individuals and training academies that promoted and advertised such services.

The petitioner also prayed the court to direct the government for legislating on the matter dealing with the prime issues of tax evasion, money laundering, financing prohibited activities, issue of registration, and penalising individuals involved therein.

Petitioner wants complete ban on such activity until a law is enacted

The respondents in the petition are federal government through finance secretary, federal law secretary, Federal Investigation Agency director general, Pakistan Telecommunication Authority chairman, Federal Board of Revenue through its Peshawar’s chief commissioner, State Bank of Pakistan governor, Security Exchange Commission of Pakistan director, and secretaries of KP finance and law departments.

Barrister Huzaifa stated that in recent years the concept of digital currency was introduced wherein the users of such currency would carry it in digital form having online digital wallets.

He stated that such currency was neither regulated nor such wallets.

He argued that State Bank of Pakistan through a public notification had declared it illegal.

The petitioner stated that despite the fact that crypto currency was declared illegal by SBP, there were numerous individuals working on different digital platforms, dealing and engaging in such trade.

He stated that those individuals were operating in Pakistan online through internet and different android and IOS applications.

He added that such trading applications empowered their users to invest in crypto trading.

He said that through different coaching centres and training academies in the province, crypto currency and digital forex trading was not only being practiced but was also promoted via social media platforms including Facebook, YouTube and TikTok.

He contended that those academies were acting unlawfully and illegally despite the implied ban imposed on crypto currency by SBP.

He added that such individuals through the applications were using digital currency including Bitcoin, Ethereum and various other crypto currencies, and were trading online through different websites and applications, referred to as “digital forex trading”.

He said that such websites and phone applications acted as a digital forex market wherein the user bought and sold stocks, international currency and digital currency.

The petitioner stated that operators and traders had digital wallets where they stored, withdrew, deposited and held their funds, either in the form of international currency or in the form of digital currency.

He said that those accounts were neither regulated by SBP nor were they registered anywhere in the country.

The petitioner stated that he had sent letters to relevant authorities including provincial administration, FIA and SECP but none of them took any action against the illegality.

Published in Dawn, December 5th, 2024