Why crypto currency not allowed in Pakistan: SHC

KARACHI: The Sindh High Court (SHC) on Monday asked Finance Department, State Bank of Pakistan, Finance Department and Security Exchange Commission of Pakistan (SECP) why crypto currency is not allowed in the country.

The court directed Finance Department, State Bank of Pakistan, Finance Department and Security Exchange Commission of Pakistan to assist the court as how crypto currency can be allowed and regulated in the country.

Hearing a petition against restriction on trading in virtual currencies, the SHC’s division bench, headed by Justice Mohammad Karim Khan Agha, observed that globally crypto currency was becoming an accepted mode of transaction.

The court observed that prima facie in many countries, it seems that regulating banks and their exchange commission putting in place safeguards to ensure that the use of crypto currency is allowed but subject to restrictions so that money laundering, terrorist financing and other illegal banking transactions are avoided.

The court observed that Pakistan should also move with the time recognising that crypto currency was now a part of business transactions. The court observed the fact that the SBP and SECP were not allowing the crypto currency business transactions was driving this mode underground and thereby causing such trade and transactions in the black market.

The court observed that Pakistan needs to move with the time and should embrace crypto currency business or otherwise and regulate the same. The court directed the deputy governor of SBP, who is fully cognizant with the crypto currency market and globally how it is regulated in other countries, to appear in person and explain what the SBP was doing in order to facilitate such business whilst making appropriate regulations for the same.

The director of SECP and secretary finance were also directed to assist the court on such issue. Petitioner Waqar Zaka submitted that crypto currency was based on decentralised digital money and already such regulating facilities are available in relation to the cyber crime, which the Federal Investigation Agency was monitoring.

He submitted that there were many unregulated institutions in country which are carrying out crypto currency business in an illegal manner and this can cause danger of money laundering and terrorist financing and other criminal activities.

The court also directed director FIA Cyber Crime Circle to appear in person and file his comments about regulating the crypto currency exchange in the country and what action if any FIA has taken against these persons engaged in unregulated crypto currency business.