FARID PK

Merely Conducting P2P Transactions or Receiving Money in a Bank Account Does Not Make a Person a Criminal
Case Details
Court: Lahore High Court
Case No.: Criminal Misc. No. 1974-B of 2026
Judge: Mr. Justice Tariq Saleem Sheikh
Nature of Case: Pre-Arrest Bail
Outcome: Petition Allowed, Interim Bail Confirmed
Background of the Case
The complainant alleged that he was defrauded during cryptocurrency (USDT) P2P trading through an online platform, his accounts were frozen, and funds were transferred into the bank accounts of different individuals. The FIR alleged that the petitioners were part of the fraud because money had been received in their bank accounts.
The petitioners contended that they were merely P2P Merchants who received Pakistani Rupees and, in return, transferred USDT. They had no connection with any fraud, cheating, forged documents, forged electronic records, or the freezing of the complainant’s accounts.
Key Observations of the Court
The Court held that the mere receipt of money in a person’s bank account is not proof that the person participated in fraud.
The Court made it clear that the prosecution failed to establish that the petitioners:
deceived anyone;
created any forged document or forged electronic record;
altered computer data; or
participated in any conspiracy to cause loss to the complainant.
The Court further observed that the investigating agency must establish the role of each accused separately because criminal liability is always individual criminal liability.
What Did the Court Say About the PPC?
The Court held that:
Section 468 PPC (Forgery for the Purpose of Cheating)
Section 471 PPC (Using a Forged Document as Genuine)
will apply only where there is a forged document or a forged electronic record.
In the present case, no such evidence existed. Therefore, these provisions did not prima facie apply to the petitioners.
What Did the Court Say About PECA?
The Court explained Sections 13 and 14 of PECA in detail and held:
Section 13 PECA
Applies only where a person alters electronic data to create false or unauthentic data so that it may be treated as genuine.
Section 14 PECA
Applies where a person dishonestly uses an electronic system to commit deception or obtain an unlawful benefit.
The Court held that:
Merely transferring USDT, conducting online trading, or engaging in P2P transactions does not automatically attract these provisions.
What Did the Court Say About FERA?
The prosecution argued that USDT is equivalent to foreign currency and therefore FERA applies.
The Court rejected this argument and held that:
Merely because the value of USDT is linked to the US Dollar does not make it Foreign Currency or Foreign Exchange.
Unless it is established that a prohibited Foreign Exchange Transaction has taken place under the law, the provisions of FERA will not apply.
Why Did the Court Refer to the Indian Supreme Court Judgment?
The Court referred to Internet and Mobile Association of India v. Reserve Bank of India (2020) and observed that virtual currency cannot be called Currency merely because it is used as a means of payment.
If the law does not recognize it as Currency, the Court cannot declare it to be Currency on its own.
What Did the Court Say About Physical Remand?
The Court held that:
the petitioners had already joined the investigation;
all bank records, electronic records, and documents were already available to the investigating agency or could be obtained; and
the petitioners had not misused the interim bail.
Therefore, the need for Custodial Interrogation was not established.
Golden Principles Laid Down by the Court
Mere receipt of money in a bank account does not prove a crime.
Mere P2P or USDT transactions are not a crime.
Criminal liability is always individual.
The role of each accused must be established separately.
Clear evidence of electronic fraud or forged electronic data is necessary for applying PECA provisions.
Sections 468 and 471 PPC apply only where there is a forged document or a forged electronic record.
USDT cannot automatically be treated as Foreign Currency or Foreign Exchange.
Arrest or prosecution cannot proceed merely on suspicion or assumptions.
If an accused cooperates with the investigation and custodial interrogation is unnecessary, pre-arrest bail may be granted.
At the bail stage, the Court only examines whether a prima facie offence is made out. The final decision will be made by the Trial Court on the basis of evidence.
Final Decision
The Lahore High Court held that, based on the available record, the relevant provisions of PPC, PECA, and FERA were not prima facie established against the petitioners. The petitioners had joined the investigation and had not misused the interim bail. Accordingly, the Court confirmed the pre-arrest bail and directed each petitioner to furnish a surety bond of Rs. 1 million along with one surety in the like amount.
This judgment is an important precedent regarding cryptocurrency, USDT/P2P trading, PECA, FERA, and pre-arrest bail because the Court clarified that a person cannot be treated as a criminal merely on the basis of bank transactions or cryptocurrency transactions. Rather, prima facie evidence of every legal ingredient of the alleged offence must exist.
Not According to the Pakistan Dawn News 📰
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Every time Bitcoin starts making headlines, the same question comes back.
"Is Bitcoin fake?"
Some people call it a scam.
Others call it gambling.
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So who's right?
Let's break it down in the simplest way possible.
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Someone else borrows money, uses high leverage, and hopes one lucky trade will change their life.
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It usually punishes them.
Can People Really Make Money From Bitcoin?
Yes.
Without any doubt.
Millions of people around the world have made money from Bitcoin.
But there is one important detail that most people ignore.
The majority of long term winners were patient.
They didn't become rich because they were lucky.
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Bitcoin has gone through multiple crashes of 50%, 70%, and even more.
Yet every cycle, many long term holders stayed invested instead of panicking.
Patience has historically rewarded investors far more often than emotional trading.
Why Do So Many People Think Bitcoin Is a Scam?
Imagine two people.
Person A buys Bitcoin because they believe in its long term future. They invest only money they can afford to leave untouched for several years.
Person B buys Bitcoin hoping to double their money in a few days. They start using high leverage, chase every pump, and refuse to manage risk.
If Person B loses everything, was Bitcoin the scam?
Or was the strategy the problem?
Many people blame Bitcoin after taking unnecessary risks.
That's similar to blaming a car because someone decided to drive at 200 km/h without wearing a seatbelt.
The tool isn't always the problem.
Sometimes the way it's used is.
Is Bitcoin Gambling?
Buying Bitcoin for the long term is not the same as gambling.
Trying to become rich overnight by risking your entire savings is much closer to gambling.
Think about it this way.
If someone tells you,
"I turned $2,000 into $10,000 in a very short time."
That sounds exciting.
But very few people ask the next question.
Could that same person also lose the entire $2,000 just as quickly?
The answer is yes.
Higher potential rewards almost always come with higher risk.
A Simple Example Anyone Can Understand
Imagine you have some extra money that you don't need for daily expenses.
You have two choices.
You buy a small piece of land and wait several years, hoping its value increases.
Or you buy Bitcoin and are prepared to hold it for several years while accepting that prices may rise and fall along the way.
Both are investments.
Both involve risk.
Neither guarantees profits.
The biggest difference is that Bitcoin can be much more volatile, which means its price can move sharply in both directions.
That is why patience and discipline matter so much.
The Biggest Mistake Beginners Make
Beginners often focus on one question.
"How much money can I make?"
Experienced investors ask a different question.
"How much money can I afford to lose?"
That single mindset changes everything.
People who survive in investing protect their capital first.
Profits come later.
So, Can Bitcoin Make You Rich Overnight?
In theory, a few people have experienced extraordinary gains.
In reality, most people who chase overnight wealth either lose money or take risks that eventually catch up with them.
Building wealth usually takes time.
Bitcoin is no exception.
Final Thoughts
Bitcoin is neither magic nor guaranteed wealth.
It is also not automatically a scam simply because someone lost money.
Like any investment, success depends on understanding risk, controlling emotions, and thinking long term instead of chasing quick profits.
If you're entering Bitcoin with the mindset of becoming rich tomorrow, you're setting yourself up for disappointment.
But if you're investing with patience, realistic expectations, and proper risk management, Bitcoin can be one of the most interesting long term assets to study and potentially own.
Do your own research before making any investment decision. Never invest money you cannot afford to lose.
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