The Financial Intelligence Unit (FIU) of Nepal has documented an increase in crypto-related fraud, despite the country’s severe ban on trading digital assets. The FIU, a section of Nepal Rastra Bank, is responsible for countering financial crimes such as money laundering and terrorism financing.
The recently released “Strategic Analysis Report” focuses on how fraudsters use cryptocurrencies to launder unlawful funds. By transferring illicit money into digital currencies, these criminals make it impossible for police to track down and retrieve assets. Additionally, the simplicity of transferring cryptocurrency to offshore accounts complicates fraud investigations.
The survey also revealed that internet advertisements or social media posts frequently lure consumers into bogus cryptocurrency investment schemes that promise unreasonably large profits. The unlawful status of cryptocurrency trading in Nepal inhibits victims from reporting such frauds, resulting in underreporting and allowing scammers to operate undetected.
To address this rising concern, the FIU has proposed a number of steps, including increased inspection of bitcoin transactions and training financial institutions to recognize suspicious activity. Public awareness initiatives are also an important component of the approach, aimed at teaching citizens about the dangers of cryptocurrency fraud and how to prevent falling victim to frauds.
To effectively combat digital payment fraud, the FIU underlined the importance of increased collaboration among government entities as well as an improved regulatory framework. These efforts aim to eliminate vulnerabilities and prevent the use of cryptocurrencies for unlawful purposes.
As Nepal grapples with the problems posed by cryptocurrencies, these efforts demonstrate a strong commitment to protecting its financial system and residents from fraud.
