Nepal boosts crypto fraud fight with awareness plans

The Financial Intelligence Unit (FIU) of Nepal has reported a significant rise in crypto-related fraud, despite an ongoing ban on trading digital assets.

In its “Strategic Analysis Report” published on November 18, the FIU, which operates under Nepal Rastra Bank, emphasised that cryptocurrencies are being used by bad actors to launder illicit funds, complicating efforts to trace these assets due to their ease of transfer offshore.

The report highlighted that fraudsters often lure victims through social media and online advertisements, promising high returns.

This tactic has made many Nepali citizens vulnerable to scams.

The illegal status of crypto trading in the country has also discouraged victims from reporting fraud due to fear of repercussions and embarrassment, contributing to underreporting.

According to data up to May 2024, around 64% of all reported fraud cases in Nepal were cyber-enabled.

To address these challenges, the FIU has proposed enhanced monitoring of crypto transactions and training financial institutions to identify and report suspicious activities promptly.

The FIU further recommended launching public awareness campaigns to educate citizens and reduce their susceptibility to scams.

Strengthening inter-agency cooperation and updating existing regulatory frameworks were also suggested to better handle digital payment fraud.

Similar measures are being considered globally.

South Korea’s Finance Minister, Choi Sang-Mok, stated at a G20 meeting that the country would mandate reporting for cross-border crypto transactions.

Businesses handling such transactions will be required to register and report details to the Bank of Korea on a monthly basis.