In Nepal, despite a government ban on trading digital assets, cryptocurrencies are actively used to plan cybercrime. The Financial Intelligence Unit (FIU), a specialized section of Nepal's central bank, monitors such crimes.
Analysis of FIU Report
The FIU highlighted the growing trend of using cryptocurrencies as a means of money laundering in its 'Strategic Analysis Report'. Criminals frequently convert funds into cryptocurrencies, making it difficult to trace and recover stolen assets.
Issues with Fraud Reporting
Victims of crypto fraud often refrain from reporting incidents due to the stigmatization of crypto trading. As of May 2024, approximately 64% of the fraud reported to Nepalese authorities involved some kind of cyber-enablement.
FIU’s Suggestions to Counter Threats
The FIU proposed training financial institutions to recognize warning signs and report them promptly, along with stricter examination of crypto transactions. Updating legislative frameworks, enhancing inter-agency collaboration, and raising public awareness were also suggested to reduce fraud vulnerability.
With growing cyber threats, the need for effective measures against financial crimes related to cryptocurrencies in Nepal becomes increasingly critical.
