The Security and Exchange Commission of Pakistan (SECP) has instructed all companies and Limited Liability Partnerships (LLPs) to stop dealing, trading, using, holding, promoting, transferring value and investing in cryptocurrency.
To tackle dealings of cryptocurrency (Bitcoin) the SECP issued S.R.O. 795 (I)/2020. In which SECP directed commodities brokers, insurance companies, security brokers, Takaful operators, non-banking finance dealing businesses and Modarabas to report any activity related to this matter to Financial Monitoring Unit (FMU). The activity will be considered as a doubtful transaction in obedience with Anti Money Laundering and countering the Finance of Terrorism Regulation 2018.
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According to a statement from SECP, the Central Bank of Pakistan (SBP) through its Circular #03 of 2018 has banned all kinds of dealings in virtual coins/currencies/Token and companies are now ordered to stop dealing in cryptocurrency.
“Virtual Currencies (VCs) like Bitcoin, Litecoin, Pakcoin, OneCoin, DasCoin, Pay Diamond etc. or Initial Coin Offerings (ICO) tokens are not legal tender, issued or guaranteed by the Government of Pakistan. SBP has not authorized or licensed any individual or entity for the issuance, sale, purchase, exchange or investment in any such Virtual Currencies/Coins/Tokens in Pakistan.”
“In view of the foregoing, all Banks/ DFIs/ Microfinance Banks and Payment System Operators (PSOs)/Payment Service Providers (PSPs) are advised to refrain from processing, using, trading, holding, transferring value, promoting, and investing in Virtual Currencies/Tokens. Further, banks/DFIs/Microfinance Banks and PSOs/PSPs will not facilitate their customers/account holders to transact in VCs/ICO Tokens.”
The Security and Exchange Commission of Pakistan therefore in the exercise of power under section 40B of the Act 1997 directs all companies and LLPs to make sure the compliance with the circular of the State Bank of Pakistan in letter and spirit.
Any violation or an infringement regarding this instruction, among other things, shall be constructed as a breach of Section 40A of the SECP Act 1997 and penalty shall be imposed accordingly.