SHC forms committee to review legal status of cryptocurrencies

• Court prevents FIA from taking action against those operating digital currency businesses.
  
• Court directs petitioner to assist the committee and give his recommendations to it.
  
• The first meeting of the committee will be held on October 25.

The Sindh High Court on Wednesday ordered the government to form a high-level committee to review the legal status of cryptocurrencies as it heard a petition demanding that the court declare a State Bank of Pakistan order null and void.

The court stated that steps should be taken to regulate cryptocurrencies in consultation with all stakeholders, including representatives of the Security and Exchange Commission of Pakistan (SECP), State Bank of Pakistan (SBP), the Ministry of Law, the Ministry of IT, Pakistan Telecommunication Authority (PTA) and the petitioner Waqar Zaka.

Zaka, in his petition to the court, stated that the SBP governor, in a notice dated April 6, 2018, had advised banks and payment system operators to "refrain from processing, using, trading, holding, transferring value, promoting and investing in virtual currencies/tokens"

The petitioner asked the court to declare this notice null and void, arguing that it violates Articles 4 and 18 of the Constitution.

He also sought an order against the Federal Investigation Agency, preventing it from taking action against people operating digital currency businesses.

The court's proceedings today were attended by members of the FIA, the SBP deputy governor and the petitioner.

The court stated that steps should be taken to regulate cryptocurrencies in consultation with all stakeholders, including representatives of the Security and Exchange Commission of Pakistan (SECP), SBP, the Ministry of Law, and the Ministry of IT.

The court directed the petitioner to assist the committee and give his recommendations to it.

The first meeting of the committee will be held on October 25, the court said, adding after that, the committee will meet every fortnight.

Moreover, the court restrained the FIA ​​from taking action against those trading in digital currency and has sought a report from FIA Director Sanaullah Abbasi at the next hearing.

It was ordered that the proceedings of the committee be kept secret and no member of the committee must reveal any details on the matter on social media or any other platform.

The court further directed that if a committee member is unavailable, the committee's work should not halt.

"The SECP will continue to take action against illegal exchanges," the court said.

The court adjourned the hearing of the petition till the second week of January 2022 and directed all committee members to appear at the next hearing with their reports.