In a recent event, the federal government of Pakistan has been directed by the Lahore High Court to enquire about the status quo of a plausible regulatory framework for cryptocurrency, formed by the State Bank of Pakistan (SBP). As the country moves ahead in the path of expansion of its crypto industry, the government authorities are now gearing up to figure out ways to control and regulate digital assets in the near future.
Lahore High Court Demands Laws and Regulatory Framework for Cryptocurrency
The? Lahore High Court has also asked if the Federal Investigation Agency (FIA) has taken any action against people or organizations involved in illicit crypto mining, investment, or trading. Justice Jawad Hassan further inquired whether the FIA has the proper litigation to scrutinize such matters and the steps taken by the agency to ensure these crimes fall in the ambit of scheduled offenses.
Crypto crimes and frauds have been increasing in the country at a steady pace and in order to curb them and bring cryptocurrencies within the regulatory framework, the banking authorities along with the jurisprudence of Pakistan have to devise an adequate set of rules.
The court has posed these questions while hearing the post-arrest bail petition of an accused arrested by the FIA under the charges of duping the public in a crypto investment fraud worth Rs260 million. The accused has challenged the verdict of a special court for banking in Pakistan and his defense prosecutor has said that crypto crimes do not fall under its jurisdiction or authority.
Crypto Crimes are on the Rise in the Country
Advocate Javid Kasuri, the defense prosecutor has also argued that the special courts for banking were established to pass verdicts in case of banking frauds that currently do not cover cryptocurrencies.
In recent years, Pakistan has witnessed a surge in the use of cryptocurrencies, and hence the chances of crypto frauds are doubling at an alarming. Although, the current government generally supports the crypto industry and is actively working on its central bank-backed digital currency. However, there’s also a growing demand to regulate and control the use of digital assets within the economy.
At the moment, the State bank of Pakistan hasn’t issued any formal rules that help govern these crypto-assets, thus, causing a chaotic atmosphere regarding its jurisprudence.
The court counsel agreed that the case of the issuance of cryptocurrency, was neither authorized by the SBP or any other bank, therefore, the judge of the special court had no authority to pass a verdict. The court also admitted there’s a lack of regulatory clarity about cryptocurrencies and urged the governing bodies to clarify their stance in the matter of acceptance of digital assets as security.
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