Pakistan High Court Rules P2P Crypto Transactions Are Not Automatically Fraudulent

A landmark court ruling in Pakistan has provided much-needed clarity for the country's cryptocurrency community. The Lahore High Court (LHC) ruled that peer-to-peer (P2P) transactions and receiving payments through bank accounts by themselves do not amount to fraud or an offence under the country's electronic crime laws.

The judgment came in a case where three individuals were booked by the Federal Investigation Agency (FIA) in connection with a cryptocurrency trading case. The complainant had transferred nearly Rs686 million while purchasing around 270,000 USDT after being persuaded to invest in cryptocurrency.

However, the LHC observed that merely transferring virtual assets or receiving money through a bank account does not automatically establish criminal liability. The court ruled that such actions alone are insufficient to prove offences including fraud, forgery, or violations of the Prevention of Electronic Crimes Act (PECA).

The court also noted that investigators must present concrete evidence showing that the accused intentionally deceived the complainant, created forged electronic records, or were responsible for freezing the complainant's cryptocurrency account.