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Pakistan Court: Crypto Trades Aren't Fraud
3 Aug
Summary
- Peer-to-peer crypto transactions are not inherently fraudulent, ruled LHC.
- Court stated receiving crypto funds in bank accounts is not a crime.
- Accused received Rs. 686 million for crypto without proof of deceit.
In a significant ruling, the Lahore High Court (LHC) clarified that peer-to-peer cryptocurrency transactions and the receipt of funds through bank accounts do not automatically constitute fraud or electronic crime. Justice Tariq Saleem Sheikh's detailed judgment upheld the pre-arrest bail for three individuals facing charges from the Federal Investigation Agency (FIA).
The FIA had accused the individuals of receiving approximately Rs. 686 million from a complainant who claimed to have purchased around 270,000 USDT. The complainant alleged his crypto account was later frozen.
The court stressed that the mere transfer of virtual assets or bank deposits is insufficient to prove offenses like fraud or violations under the Prevention of Electronic Crimes Act (PECA). Investigators must demonstrate that accused parties deceived investors, created forged electronic records, or were directly responsible for freezing accounts.
While cryptocurrencies lack legal tender status in Pakistan, the LHC noted this doesn't render them illegal. A 2018 State Bank of Pakistan circular restricts financial institutions, not private individuals. Buying or selling USDT is not a violation of foreign exchange laws unless an illegal transaction is proven.
