Nepal’s Financial Intelligence Unit (FIU) highlighted the rise in crypto assets abuse in the country. The agency closely monitors the cryptocurrency sector, which says illegal funds through cryptocurrencies soar in the country. Nepal Rastra Bank has released its “strategic analysis report” claiming that notorious players have been converting funds they illegally obtained into cryptocurrencies because the assets provide private transactions. Nepal is working on a roadmap to address these existing problems related to crypto exploitation.
Cryptocurrencies like Bitcoin and Ether bring an anonymous element to financial transactions that can also be facilitated in real time, making it difficult to track. This allows law enforcement agencies to follow the challenge of trading trails that can lead to sponsor identity.
FIU-Nepal (Nepal Rastra Bank) noted in its report: “It is also often observed that fraudulent gains are converted into cryptocurrencies or online betting. The purpose is to increase the amount required by Fius and Leas to access and analyze financial data required across departments. Time, and institutions make it difficult to track funds, freeze and recover earnings.”
Nepal has also witnessed an increase in fraud cases involving crypto programs that attract potential investors into risk.
“Advertising guides potential prey to deposit amounts into certain bank accounts or wallet accounts. Therefore, the amounts so deposited are not later returned as promised. In countries like Nepal, investment in virtual assets such as cryptocurrencies is illegal , victims rarely file complaints about such scams for this potential impact,” the report noted, detailing its concerns.
FIU-Nepal is currently analyzing actions taken by other countries to address cyber-support fraud. The country plans to launch an education campaign to raise awareness of the financial risks involved in volatile crypto assets.
In addition, Nepal is exploring the development of a technologically advanced platform that can track information from different financial institutions to intercept illicit gains.
In 2023, Nepal directed all Internet service providers (ISPs) in the country to block access to cryptocurrency trading platforms. At the time, people were increasingly worried about the abuse of crypto assets to transfer illegal funds. In Nepal, the use of cryptocurrencies as any currency instrument is prohibited.
