KARACHI: A report submitted to the Sindh High Court on Wednesday, said that the State Bank of Pakistan and the federal government have decided to ban the use of all cryptocurrencies.
The SHC has been hearing a case about digital currencies. On October 20, the Sindh High Court told the federal government to regulate cryptocurrencies within three months.
The court directed the government to form a committee headed by the federal secretary of finance to determine the legal status of cryptocurrencies.
The court had instructed the authorities to come up with a report on the use of cryptocurrencies. The report said that cryptocurrency is illegal and could not be used for trade. The report names at least eleven countries, including China and Saudi Arabia, that have banned cryptocurrencies.
The report also refers to the recent investigation by the FIA against crypto exchanges such as Binance and OctaFx and the risk these exchanges posed for the investors.
The Sindh High Court has ordered that the report be sent to the finance and law ministries for a final decision on the legal status of the cryptocurrencies.
The law and finance ministries will determine if a ban against cryptocurrencies would be within the ambit of the Constitution. The would also work out a legal framework.
A two-member bench headed by Justice Karim Khan Agha heard the case. The SBP Deputy Governor Seema Kamil submitted the 38-page report recommending that cryptocurrencies be declared illegal.
The report says that cryptocurrency is a virtual business that could be used to finance acts of terrorism and to launder money.
The court said that the Federal Investigation Agency (FIA) and other agencies would continue to act according to their rules.
It urged the court to ban the “unauthorized operations” of cryptocurrency exchanges and impose penalties against them “as some other countries have done.”
Petitioner Waqar Zaka pleaded with the court that cryptocurrencies be declared legal as a large number of Pakistanis were interested in them.