The Sindh High Court asked the secretaries of the federal ministries of law and finance on Monday to submit their final recommendations on the operation of crypto in Pakistan so that they may be presented to the federal cabinet for a policy decision.
Hearing a petition challenging restrictions on trading virtual currencies, a division bench led by Justice Mohammad Karim Khan Agha observed that the ministries of finance and law had been directed to reach a final decision on whether or not crypto in any form was to be allowed in Pakistan, and if so, what the regulatory framework of such business would be.
The court noted that the ministries had been directed to make joint recommendations on whether the business of crypto in any form could legally be carried out in Pakistan, as this was also causing difficulty at this time for those who were engaged in such businesses, with constant raids by the Federal Investigation Agency and freezing of bank accounts allegedly opened by users/dealers of this type of currency.
It also noted that the two ministries had filed an interim report, which revealed that little progress had been achieved in formulating recommendations in response to court orders in the previous three and a half months.
The court remarked that both ministries were taking this subject very lightly, and that at their current pace, no recommendations would be issued for years. It urged the law and finance secretaries to file their final recommendations obtained after accelerating discussions with key stakeholders, so that such suggestions could be presented to the federal cabinet, which may make a policy decision in this regard. The secretaries were ordered by the court to submit their reports by June 13.
A committee formed under the supervision of the deputy governor of the State Bank of Pakistan and other authorities to investigate the operation of any type of crypto currency in Pakistan proposed a full ban on crypto and other similar activities.
The Sindh High Court established the committee, which included officials from the ministries of finance, information technology, Pakistan Telecommunication Authority, and Security and Exchange Commission of Pakistan, to consider whether any form of crypto was permissible under Pakistani law.
Petitioner Waqar Zaka filed a case at the SHC challenging the SBP announcement restricting the use of virtual currencies for commerce and banking activities, and he demanded the validity of virtual currencies and crypto minting.
He said that the SBP’s impugned decision prevented Pakistanis from engaging in business related with technology-based professions, particularly virtual currencies/assets, which was a flagrant breach of freedom of business and occupation and could not be supported in any way. The court was asked to declare the SBP’s impugned order unconstitutional because it prohibited people from carrying on business that was not prohibited by any legal statute in Pakistan, and to direct the government to draught a regulatory framework that clearly defined the official stance and mechanism regarding virtual currencies and assets, as well as crypto minting.