30s Summary

Despite the ban on cryptocurrency trading in Nepal, online scammers continue to use digital coins for illicit activities, reports the country’s Financial Intelligence Unit (FIU). Cryptocurrencies are being used to launder money and to defraud investors through false promises of high returns. As a result, FIU proposes increased scrutiny of crypto transactions, additional training for financial institutions to spot warning signs, public awareness programs about fraud, and enhanced inter-agency cooperation. The authorities are also considering revising rules to combat digital payment scams.

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Despite the official ban on cryptocurrency trading in Nepal, the country’s Financial Intelligence Unit (FIU) says online scammers are still using digital coins to carry out their dodgy deals. The FIU is the group within Nepal’s central bank that works to stop scams, especially ones linked to money laundering and terrorism funding.

A recent report by the FIU showed an uptick in criminals using cryptocurrencies to launder dirty money, making it super hard for authorities to follow the money and get it back. This is mainly because it’s easy to transfer cryptocurrencies into accounts abroad without getting caught.

Many people in Nepal are also falling foul of scammy crypto investments, lured in by crazy promises of big returns on social media or online ads. Often, those caught up in these schemes are too scared or too embarrassed to report their losses because crypto trading is against the law. As a result, the real amount of crypto fraud going unreported is likely to be high.

Shocking fact: almost two-thirds of all fraud reported to authorities in Nepal until May 2024 involved online methods.

So, to fight this surge in crypto scams, the FIU is proposing a couple of key actions. It wants increased scrutiny of crypto transactions and is calling for more training to help financial institutions spot the warning signs so they can report suspicious activities quicker.

The FIU also recommends raising public awareness about fraud to make it harder for scammers to trick people. It also wants to strengthen its teamwork with other agencies and update the rules to better tackle digital payment scams.

Other countries are also cracking down on crypto-related fraud. South Korea’s Finance Minister recently announced that any businesses dealing with cross-border crypto transactions have to register with the authorities and report all details to the central bank every month.