Lahore High Court rules P2P crypto trading not a crime in Pakistan

The Lahore High Court (LHC) issued a 15‑page judgment, authored by Justice Tariq Saleem Sheikh, that peer‑to‑peer (P2P) cryptocurrency trading and receiving related funds in a personal bank account do not automatically constitute fraud, forgery or an offence under Pakistan’s Prevention of Electronic Crimes Act. The ruling upheld the pre‑arrest bail of three individuals accused by the Federal Investigation Agency (FIA) after a complainant claimed to have transferred roughly Rs 686 million to purchase about 270,000 USDT (Tether) and later alleged his crypto account was frozen.

The court held that prosecutors must prove the accused deliberately deceived the investor, created false electronic records, or were directly responsible for freezing the account; mere buying, selling or receipt of crypto does not meet that threshold. While cryptocurrencies are not recognised as legal tender in Pakistan, the judgment clarified that owning, buying or selling them is not illegal for private individuals. The State Bank of Pakistan’s 2018 circular, which restricts banks from dealing in crypto, does not criminalise personal crypto trading, and trading USDT does not breach foreign‑exchange laws absent specific illegal transactions.