The Nepalese police have arrested at least seven individuals for allegedly being involved in virtual currency trading activities in the country as of early October 2017. The arrests were made despite the absence of regulations covering the trading of cryptocurrencies in the country.
Based on local press reports, the suspected traders were arrested by members of the Central Investigation Bureau (CIB) in Kathmandu and Chitwan. Among those arrested were Prashant Pratap Shah of Kathmandu, Bida Dhakal of Nuwakot, and Mingmar Tamang of Sindhupalchok.
According to the CIB’s DSP Jeevan Kumar Shrestha, this is the first time that cryptocurrency exchange operators were arrested in the country.
“They have been kept at the police custody. The traded amount will be discovered after further investigation.”
Possible ban
The arrests made by the CIB are expected to raise more questions than answers, as the trading of Bitcoin and other cryptocurrencies is not considered illegal, because of the absence of regulations on the issue in the country. Due to the situation, it is still unclear what offenses will be filed against the arrested individuals.
Meanwhile, the Nepalese government is already drafting regulatory guidelines covering digital currency trading. Among the possible regulations that will be imposed by authorities is a total ban on the trading of cryptocurrencies.
Due to this possibility, digital currency exchange operator Bitsewa has already ceased its operation in early October. The exchange is considered as the Nepalese version of LocalBitcoins.
Although digital currency activities in Nepal are not so big, any form of regulation against cryptocurrencies may set a dangerous precedent and hinder innovations in the sector. Due to these developments, it is very interesting to see how the virtual currency industry in the country will develop in the short term.
The country has also previously notoriously seized all relief funds in bank accounts ‘to ensure all donations are not misused’.