PESHAWAR:
The Peshawar High Court (PHC) has directed the federal government to formulate a policy within two months regarding the prevention of illegal business and trading of crypto currency across the country, including Khyber Pakhtunkhwa. It has also ordered the government to submit a report.
A division bench consisting of Justice Syed Arshad Ali and Justice Dr Khurshid Iqbal issued this order while hearing a petition filed by Barrister Huzaifa Ahmad, who represented himself in court. Deputy Attorney General Bilal Durrani represented the federal government.
The petitioner contended that in this era of technology, the concept of digital currency has emerged, through which money is transferred digitally. However, there is no regulation or legal framework to control such currencies.
He said the State Bank of Pakistan, through a notification issued in 2018, declared such online business activities illegal. Despite this, many individuals continue to operate on various digital platforms.
According to the petitioner, not only are coaching centers and training academies operating in the K-P offering services related to cryptocurrency and forex trading, but they are also being promoted through social media platforms such as TikTok, Facebook, and YouTube.
These academies are functioning illegally without any government monitoring.
The petitioner said operators and traders are able to collect, withdraw, and freeze funds online, and that the relevant authorities are aware of this illegal trade but have taken no action to stop it. He said he had written to the concerned authorities in this regard but received no response.
He said as per the rules of the Securities and Exchange Commission of Pakistan (SECP), such entities should be registered under the securities exchange regulations.
However, these digital applications and training academies are not registered, even though they could serve as a source of tax revenue for the Federal Board of Revenue (FBR).
He also warned of the risks of money laundering and terror financing through digital currency. This kind of trading, he said, could pose a threat to national security, as it could be used for terrorism, gambling, and other anti-state activities
“Therefore, it is the responsibility of the federal and provincial governments to ban such illegal businesses and to shut down the institutions and academies involved in crypto and forex trading.”
He requested the bench to direct the government to legislate against such unlawful businesses and to order the Federal Investigation Agency (FIA) and other relevant authorities to take action.
The deputy attorney general informed the court that the federal government is in the process of legislation. He requested one month’s time.
In response, the bench granted two months’ time to the government. The court later postponed the hearing while directing the federal government to present a policy within the given period.