Waqar Zaka (Petitioner) VS Fed. of Pakistan and Others (Respondent)

ORDER SHEET

HIGH COURT O F SINDH'' AT KARA CHtr >t$ C. P. No.7146 of 2Ol9

Date Order with signa ture of Judges \ r

\- PRIORITY

l. Fo r orders on office objection.

2.Fo r hearing of CMA No.36301/2019

3.Fo r hearing of main case.

21J.LO.2021.

Waqar Zaka, Petttioner in Person.

Mr. irshad Ali, Assistant Attorney General' Ms. Seema Kamil, o"p"tv C."J*ot, Mr' Raza Mohsin Qizlibash' Director Legal, IvIr. S;hail Jawaid, Executive Director' Mr' Alam Bank of Zalb, Law Officer and Mr. Atif Uddin, Legal Counsel' State Pakistan.

Ali Mr. Asif Iqbal, Director, Mr. Ibrar Saeedt t-,gg'l-Ytld , Mr.I mran Officer, Shamsi, neputy Director Law, and Sygd Eb-#' Security B"tfr.t ge Commission of Pakistan' {ff ^rd ------- 'r! ' .kt':

Mohammtd Kqfim Khan Agha, J' In essence the petitioner wants to open the business concerning crypto currency exchange in Pakistan. Vide order dated O4.LO'2O21 we had called Deputy Ggvernor, State Bank of Pakistan, Secretary, Finance Department' Government of Pakistan, Director, Security and Exchange Karachi Cgmmission of Pakistan and Director, FIA, Cyber Crimes' in order to assist this Court in this matter' Regrettably' Director' FlA, Cyber Crimes, Karachi has not put in an appearance'

2.It appears from submissions made in Court today that prima to facie at this point in time it is very difficult or indeed impossible I cqrry out business concerning crypto currency largely based on State circulars which were issued by State Bank of Pakistan' The is Bank of Pakistan have candidly conceded that crypto currency not legal tender in Pakistan. They have stressed that the use of the crypto currency in any form is also a difficult task to regulate arad that at this point in time no such regulations exist and that trade under the larv it has not even been made clear whet-her any in crypco currency u'hich is not legal tender is allowable' In this pels:ns regard, it is noted that the FIA has lodged FIRs against transacting crypto currency business and crypto miners for being in violation of State Bank of Pakistan circulars' J It' appears to us ;that the first issue which needs to be , decided is whether Pakistan will or will not allow . anYg,

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trade/'rransactlon 01'any kind in crypto currency. It is noted that a > l1 number of countries are allorving such trade and since Pakistan is- a progressive country and needs to keep up with global banking pi'ac[ices it might want to consider the legality ?fucegain types of crypto currency being transacted in this counffiptwiaea that a proper regulatory frame work is put in place. Sidce rlse of_crypto currency is a relatively new form of banking / business transaction and much thought and consideration needs to be taken as to whether any form of crypto currency is to be permissible we hereby set-up a committee to be chaired by Ms. Seema Kamil, Deputy Gevernor, State Bank of Pakistan which shall also constitute the Secretary, Finance or Additional Secretar;r, Finance Departrhent, Gqvernment of Pakistan who is well conversant with crypto cLttrrency, Chairman, SECP or any senior officer of SECP well conversant with crypto currency, Chairman, PTA or any senior officer of PTA well conversant with crypto currency, Secretary or any other senior officer, Ministry of Information & Technologr, il Government of Pakistan, Director General, Financial Ivlonitoring Unit (FMU), State Bank of Pakistan and Petitioner Mr. Waqar Zaka, who is seeking to open a crypto currency exchange business in Pakistan.

'+. The first meeting of the aforesaid committee shall be held on Mt,nday 25e October, 2021 at the offices of the State Bank of Pakistan in Karachi and thereafter on'fortnightly basis' At least 03 days prior to the committee meetings, copy of its Agenda shal,l be circulated amongst all the members of the committee as well as the pet,itioner. Initially the committee shall be addressed by tt-te pelitioner, Mr. Waqar Zaka; who is very much in favour of crypto

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currency in Pakistan and has expertise in this field who shall give a full presentation and briefing on the reason why crypto currency in some fprm should be allowed in this country and how it might be regulated. The Committee shall consider the presentation and proposals made by the petitioner Mr. Waqar Zaka and come back r.vrth tLieir owl.: rcsporlse to the same on.the next meeting which should enable an open and informal discussion whether or not it is advisable that Pakistan allow trade in crypto currency in any form, whatsoever. It is emphasized that the petitioner is only on the Committee in order to assist it in making-its recommendations. to the Ministry of Finance, Government of Pakistan o*the viability of crypto currency brrsiness in Pakistan. After fuly.ftonliaering all rMAK/PS

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aSpe(][Softtreadvisabilityofal1owinginanyformoftradein".yp- (rurrency in Pakrstan, keeping in view Article 1g of the constitution i'"'hich concerns freednm of trade business or profession and is a fundnme,ral right, if it is of the vierv that it would not be so advisable rhe commitree shall forward such recommendations to tire secrerary, Ministry of Finance, Government of pakistan with its rcasoning why. If the Committee is of the view that some kind of ci)"pto currency business may be permissible in pakistan once a.qain it shail forward its recommendations to t].e Ministry of Finance along wirh such regulatory frame work in draft form which might be considered appropriate subject to fine tuning. It shalr then be for the Ministry of Finalce thereafter to take_up such recommendations and consider whether it deems it both viable and appropriate that any kind of iaw in this regard should, be p,mulgated, keeping in vieu'Article 1g of the constitutior, *lri"r, is a fundamental right. It is made clear that the decision whether or not to allow any form gl crypto currency business in pakistan sh.rll lrc la policy decision which shall made by the Federal Governrndnt

5' we appreciate the passion and vision of the petitioner in attL'mpting to introduce this form of banking in pakistan, however, we make it clear that the meetings of the Committee, minutes of the meetings a,d alr documents eind other material discussed the.ein shall remain secret/confidentiar and that no member of the cornmittee shall make any press reiease statement or social media activity or any other kind of disclosure in respect of the same. The prinre object and purpose of the committee is onry to consider wheiher it is both viable etnd advisable whether|lerhaps as a matler of policy the Government of pakistan n{ight consider introducing some kind of crypto currency business in pakidtan.

The petitioner's role is to facilitate criscussion to ensure that both sides are heard and fully appreciated before the committee makes any recommendations. If any member of the committee is not available then this shalr not stop the committee from proceeding and Llie person who rs unavailable from the relevant authority, shall send irs representative, who is well conversant with crypto currency in his place. In our vier.t, if such business is already being carried out underground in this country it would be better if it was regul.rted to avoid the possibility of money raundering and terrorist

i-' z>l financing or other illegal activities through such business practices.

6 To come up on L2.O1,2O22 at IO:OO a.m when all the niembers of the committee shall be present before this court along with the peticioner Mr. Waqar Zaka when they shall place before this court their inirial report regarding feasib,ity $f int oau"tion of crypto currency in any form in pakistan. lil

7 ' A copy of this order sha, be sent through facsim,e to Deputy Governor, State Bank of pakistan, Secretar,r, Finance Department, Government of pakistan, Director, $ecurity and Exchange Commission of pakistan, Secretanlr, pTA, Government of Pakistan' secretary, Ministry of Information & Technologr, Government of pakistan, Director, FIA, Cyber Crimes, Karachi and all rnembers of the aforesaid Committee for compliance.

8.In the meantime, despite the absence of the Director, FIA, cyber crimes we hereby direct him and the officers working under him to act strictly in accordance with law in respect of those perspns who might be seeking to indulge in the business of crypto currency and if deemed necessary I seek guidance from the state Banl< of Pakistan on this issue especia,y insofar as it rerates to its circulars' copy of this order shail be sent through facsim,e to Direc;tor, FIA, Cyber Crimes, Karachi for compliance.

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