KARACHI – Sindh High Court Chief Justice Muhammad Junaid Ghaffar has highlighted the pressing need for amendments in Pakistan’s legal framework to effectively deal with cases concerning virtual assets and cryptocurrencies. His remarks came during a conference on digital and virtual assets held at the Sindh Judicial Academy, where he underlined the complexities courts face in adjudicating such matters without clear legislative guidance.
The chief justice noted that cryptocurrencies and digital assets represent a new and evolving challenge for the country’s legal system. Despite the growing number of cases filed by the Federal Investigation Agency (FIA) involving online businesses, hidden assets, and cross-border transfer of funds, Pakistan’s existing laws remain insufficient to address the unique nature of digital transactions. “Courts often face cases involving concealed funds or assets transferred through non-traditional digital platforms, yet the legal provisions available to us are outdated,” Justice Ghaffar remarked.
He emphasized that judges require specialized training to understand the intricacies of blockchain technology, cryptocurrency exchanges, and the financial risks associated with digital assets. However, he acknowledged that even as legislation has been introduced globally, Pakistan continues to approach the issue cautiously due to regulatory concerns.
Justice Ghaffar pointed out that the State Bank of Pakistan had already imposed a ban on digital currencies, and the government has yet to lift this restriction. He noted that the finance ministry has expressed apprehensions, particularly as only around 15 percent of Pakistanis reportedly use crypto platforms. There also remains a risk of Pakistan facing renewed scrutiny from global watchdogs and being placed back on the Financial Action Task Force (FATF) grey list if crypto transactions are not properly regulated. “That is why the government is proceeding with extra caution,” he added.
The chief justice stressed that progress cannot be made until the central bank provides clarity on its position regarding virtual currencies. He further highlighted that the Sindh High Court, like other judicial bodies, cannot independently pursue public-private partnerships due to existing legal restrictions, though digitization of court records is gradually advancing.
On the subject of Pakistan’s crypto ordinance, Justice Ghaffar observed that the role of courts and tribunals has not been properly defined. “Under the ordinance, any tribunal may be assigned authority to hear such cases until a dedicated tribunal is established,” he explained, adding that ambiguity in the law leaves judges uncertain about jurisdiction.
Justice Ghaffar concluded by reiterating that numerous amendments across multiple laws would be necessary before the judiciary can effectively adjudicate cases involving cryptocurrencies and virtual assets. “Courts do not make laws; they interpret them. For this reason, legislative clarity is essential before meaningful progress can be achieved in this domain,” he said.
The remarks reflect growing recognition within Pakistan’s judiciary that digital financial assets cannot be addressed within the confines of outdated frameworks. Without comprehensive reforms, the challenges of regulating crypto and safeguarding financial transparency will continue to strain both regulators and courts.
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