Likewise in the worldwide, Pakistan too was looking to promote crypto industry in the country. In pursuit of this, Pakistan’s regulator of securities and financials, Securities & Exchange Commission of Pakistan (SECP) was preparing a draft law.
Similarly, a Joint Resolution was passed by Khyber Pakhtunkwa’s Provincial Assembly which had legalized holding of cryptocurrencies and its trade.
However, a law petition was filed in Sindh High Court at Karachi seeking suspension of restriction over trade of cryptocurrencies.The petition was filed by a famous Pakistani TV host turned youtuber, WaqarZaka. In this petition, Zakahad also instituted country’s central bank i.e. State Bank of Pakistan (SBP) as well as Federal Investigating Agency (FIA). In the FIR it was alleged that Zaka had conducted illegal cryptocurrency trade and termed it as cybercrime.
In his petition Zaka alleged that in 2018 SBP issued a notification regarding cryptocurrencies. Through this notification SBP restricted entire banking sector to allow any transactions on the basis of digital currency.Zaka had challenged SBP’s notification on the pretext of it being illegal and ultra vires of the Constitution of Pakistan. He alleged that through the notification the constitutionally guaranteed right of Pakistani citizens had been curtailed. He further said that SBP had declared Bitcoin, Litecoin and other by-products of digital assets as not fit for tender.
Before filing of his petition, Zaka was named in an FIR which was lodged against him by FIA.
The Court then summoned Governor of SBP to record his statement. The Court also directed Governor to clarify whether there is any law or regulation existed on cryptocurrencies in the country.
On the date of hearing when arguments were heard SBP categorically stated that it had not declared crypto trading illegal. He further apprised the Court that for the time being there are no laws regulating the crypto industry. However, the crypto business is being conducted in the country through outsourcing, he added.
The Court also took serious note of non-appearance of Pakistan Federal Investigating Agency’s Deputy Director. The Court had directed him to appear before the Court and submit his comments but he failed to do so.