The Peshawar High Court (PHC) disposed of a writ petition seeking a ban on unregulated crypto currency and digital forex trading regulation in Pakistan, declaring the plea infructuous.
A two-member bench, comprising Justice Naeem Anwar and Justice Kamran Hayat Miankhel, ruled that the introduction of the Virtual Assets Ordinance 2025 now provides the necessary legal framework for licensing and regulation.
Legal Framework Supersedes Litigation
Justice Kamran Hayat Miankhel authored the eight-page written verdict, noting that the new ordinance effectively addresses the petitioner’s concerns. The court highlighted that the Virtual Assets Ordinance 2025 establishes a formal mechanism to regulate digital assets, making further judicial intervention unnecessary at this stage.
Petitioner Warns of Terror Financing Risks
Barrister Huzaifa Ahmed filed the petition, arguing that unchecked online crypto currency and digital forex trading activities continue openly across the country. He raised the following concerns in his plea:
- Unregulated Academies: Social media platforms and nominal “training academies” operate freely to promote these trades.
- Security Threats: The lack of oversight poses severe risks of money laundering and terror financing, threatening national security and public interest.
- Inaction by Authorities: The petitioner claimed that despite informing the Federal Investigation Agency (FIA) and the Securities and Exchange Commission of Pakistan (SECP), officials took no concrete action.
The petitioner specifically requested the court to direct the government to legislate on these matters, monitor accounts related to crypto businesses, and nullify existing State Bank of Pakistan (SBP) notifications that restrict these activities without providing a clear legal substitute.
Court Clarifies Legal Status of Crypto
In the written judgment, the court acknowledged that while crypto currency lacks formal legal status in Pakistan, existing SBP circulars merely warn financial institutions and the public to exercise caution. The bench clarified that:
- Current Status: No existing law explicitly defines crypto trading as a punishable crime or sets specific penalties.
- Policy Domain: Regulating complex financial matters and preventing illegal crypto activities requires expert policy-making.
- Jurisdiction: The court emphasized that legislation and policy formulation fall strictly within the domain of the executive and the legislature, not the judiciary.
The PHC concluded that since the government has now moved forward with the Virtual Assets Ordinance 2025, a dedicated framework and policy for regulation now exist. Consequently, the court declared the petition ineffective as the legislative relief sought by the petitioner has been initiated through the new ordinance.
