Lahore High Court of Pakistan has been hearing the case involving crypto which is the first of its kind case before the respective High Court. Court has however observed an ambiguity with regard to the status of cryptocurrencies in the country. For the purposes of removing the ambiguity the Court has itself constituted a committee consisting of top Pakistani regulators and an investigation agency to apprise the Court about the legal status of cryptocurrencies.
Lahore High Court is the biggest High Court in Pakistan which has been hearing the first crypto case of its history. The crypto case was lastly came up for hearing before the Court on 5th of November, 2021. Friday’s hearing was attended by higher officials of the top Pakistan regulators namely State Bank of Pakistan and Federal Board of Revenue. Both were directed by the Court to ensure appearance as the case involves greater public importance. Similarly, at the request of the Court, officials from the Federal Investigation Agency too joined the Court proceedings.
During the course of arguments, the Court observed that there is an apparent ambiguity and non-clarity regarding cryptocurrencies in the country. The Court said that multiple hearings have taken place and the Court has been asking country’s top regulators to assist the Court in the matter. However, no assistance has so far been provided either by State Bank of Pakistan or the Federal Board of Revenue. Though the case involves Federal Investigation Agency, yet the agency has failed to opine on the status of cryptocurrencies, said the Court.
At the outset of the case, the Court then constituted a Committee on the issue of cryptocurrencies in Pakistan. All the three i.e. Federal Board of Revenue, Federal Investigation Agency and State Bank of Pakistan have been made members of the Committee. The Court has instructed them to present their recommendations to the Court directly. The Court specifically asked to opine whether cryptocurrencies are legal in Pakistan. And, if not, how the three regulators would want to proceed in the matter further.
There were additional instructions that were given to Federal Investigation Agency by the Court. The Court has asked the agency to apprise the Court how cryptocurrencies have been treated at the international level.
The case of crypto stems from an FIR which was lodged by Federal Investigation Agency against a person named Dr. Muhammad Zafar. The agency received multiple complaints against Dr. Zafar alleging that he had committed investment fraud involving US$ 150,000. Thereafter, the alleged investment fraudster was arrested by the agency and put into lock-up. Dr. Zafar then moved an application before the relevant court seeking his post-arrest bail. However, the right of bail was denied by the lower court and therefore Dr. Zafar is contesting the matter before the High Court.