Nepal Closes Down Crypto Websites

[TL; DR]

While other countries are introducing regulations to control crypto activities, Nepal is banning all crypto activities and platforms.

The Nepal Telecommunications Authority warned that all websites and applications conducting crypto transactions should be blacklisted.

Similarly, Nepal citizens and inhabitants were warned to stop operating and using crypto platforms.

The total ban of crypto activities and trading platforms is due to increased crypto crimes.

Crypto crimes such as money laundering, terrorism financing, and other financial crimes have increased in Nepal.

The Nepal Rastra Bank has banned crypto activities and warned Nepali Nationals and non-nationals to desist from buying, trading, exchanging, and investing in cryptocurrencies.

The increase in fraud risk and continuous outflow of domestic capital from Nepal has heightened the cause of the ban.

The Nepal Telecommunications Authority and the Central Investigation Bureau are in charge of tracking and collating the list of individuals that continue to engage in crypto transactions.


Keywords: Nepal, cryptocurrency, ban, sanction, crypto, crimes, activities, transaction, illegal.


[Full Article]


Since the cryptocurrency began to receive unprecedented attention and buzz, many countries and government authorities have continued to roll out several regulations.

While some government authorities have remained silent on crypto activities in their jurisdiction, some have begun to roll out plans and policies for regulating the cryptocurrency market.

The latter group consists of government authorities that feel it is important to serve as a check and balance for the crypto industry. Such a volatile and decentralized market should not be left unregulated.

Also, In this latter group, we have government authorities that are not open to any crypto activity and are working towards the total ban of cryptocurrency activities in their country.

The Nepalese Authority falls in the latter category. In this article, we shall identify the various plans, policies, and exploitation by the Government of Nepal to halt crypto activities in the country.


Cryptocurrency Activity In Nepal

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Image: CDC. gov

It is no longer news that crypto activities are illegal in Nepal. In a warning issued by the Nepal Telecommunications Authority (NTA), the agency in charge of regulating online services and activities, websites, applications, and online networks related to crypto activities is prohibited.

In a stern warning to its citizens and inhabitants of Nepal, all crypto-related operations and facilities should not be used, operated, or managed within the country. Similarly, NTA, the regulator of the technology sector in Nepal, warned the general public about engaging in illicit activities emphasizing cryptocurrency, bitcoin trading, and online gambling.

According to the Nepal Telecommunications Authority (NTA), “If anyone is found to be doing or have done such activities, action will be taken according to the prevailing law.”

To further actualize a crypto-free Nation, Nepal’s Ministry of Communications and Information Technology, through the Nepal Telecommunications Authority, directed the Internet Service Providers (ISPs) to shut down all cryptocurrency trading websites and applications. Additionally, all crypto trading and exchange platforms should be disabled and blacklisted.

While a lot is believed to be surrounding this new regulation, it is expedient to identify some of the reasons for these new directives in Nepal.


Reasons For The Shut Down Of Crypto Websites

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Image: Nepal Press

According to Surya Prasad Lamichhane, a deputy director at the Nepal Telecommunications Authority, “ The government has directed us (NTA) to shut down the applications after carrying out an investigation.”

Our investigation and close monitoring of the crypto activity in Nepal show that the main reason for the total ban of crypto activities is that economic crime has drastically increased in the country. Crypto transactions are fast and easy, and this feature has made it the most viable weapon for criminals to perpetuate economic and financial crimes.

All Over the world, government authorities, including the “Almighty United States,” are raising the alarm on how criminals use cryptocurrency for their illicit acts. Cryptocurrencies are used for money laundering, ransomware attacks, duping, and terrorism financing.

Similarly, the Central Bank Investigation Bureau (CIB) of Nepal Police has announced that cryptocurrencies are illegal and not accepted in Nepal. This security agency has since then swung into action and arrested some people engaging in crypto activities.

Image: ICT Frame

The Nepal Rastra Bank (Central Bank Of Nepal) released a directive in January in relation to the ongoing "war" against crypto activities. The directive prohibits Nepali Nationals and non-nationals living in the country from buying, trading, exchanging, and investing in cryptocurrencies.

The Nepal Rastra Bank alluded to the ban as the increased fraud risk and illegal outflow of domestic capital from Nepal. Due to the investment in cryptocurrency by nationals and non-nationals in Nepali, the remittance inflow has continued to decline.

This is a cogent reason because it is affecting the Nepali economy. Instead of the people residing and making their money in Nepal to reinvest the money into the economy and bring about wealth circulation, the money is invested in cryptocurrency.

These investments in digital assets are to the tune of millions of dollars and should be adding to Nepal’s domestic capital outflow.


Conclusion

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The Nepali government has set the motion to rid the country of crypto activities and operations. According to the new regulation, you are no longer allowed to engage in legal or illegal crypto activities.

The Government has mandated Nepal's Telecommunication Authority and the Central Investigation Bureau to track all businesses and individuals engaged in crypto-related activities. This is one of the steps toward a robust regulatory framework being planned for digital asset-related activities in Nepal.

Experts, however, advised that the Nepal authority must go back to the drawing board and reverse the total ban. Instead, they should formulate a robust policy and adequate sanctions tailored towards crypto crimes. Those who engage in lawful trading and transactions should be allowed to continue their operations.






Author: Valentine. A, Gate.io Researcher
This article represents only the researcher's views and does not constitute any investment suggestions.
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