FIU Nepal report reveals rising crypto fraud, with 64% of fraud cases linked to cybercrime, urging stricter monitoring and awareness.
The Financial Intelligence Unit (FIU) of Nepal has raised concerns about the ongoing use of cryptocurrencies for fraudulent activities despite the official ban on digital asset trading. The FIU is a specialized department of the Nepal Rastra Bank, the country’s central bank. Its role includes monitoring financial fraud, money laundering, and terrorism financing. In a “Strategic Analysis Report” released on November 18, the FIU highlighted an alarming rise in cryptocurrency-based money laundering.
The report found that criminals are turning to cryptocurrencies to launder money. This presents a major problem for the authorities, who are straining to track down and retrieve such funds. The ability to transfer cryptocurrencies to offshore accounts also adds to the problem. The report emphasizes that while cryptocurrencies are designed to be secure, their use in illegal activities undermines financial stability. As a result, authorities face significant challenges in maintaining the financial system’s integrity.
64% of Fraud in Nepal Linked to Cybercrime, Mostly Crypto Scams
Many scams also relate to purchasing cryptocurrencies, which mislead Nepalese citizens. Scammers can reach their targets using social media or banners that lure people into investing in their schemes with high and very unrealistic returns. Such maneuvers have led to an increased incidence of fraud in the cryptocurrencies’ market. Regrettably, most people fear reporting such crimes because they believe they may be arrested since trading in crypto is unlawful in Nepal.
According to the Nepali authorities, about 64% of the total fraud by May 2024 was facilitated by cyber means. This suggests a huge drift towards technology as a tool for perpetrating fraud. To this end, the FIU has proposed several actions to help deal with these emerging threats. They have demanded improved monitoring of the flow of cryptocurrencies and the familiarization of financial organizations with identifying illicit activities. Accuracy in reporting by financial organizations also plays a very vital role in the prevention of fraud related to crypto.
The FIU has also suggested raising public awareness to ensure citizens can easily detect scams. The FIU also thinks better collaboration with other agencies and modernizing frameworks to combat digital payment fraud are needed. These steps have been taken to counter the effects of cryptocurrency-related crimes and prevent fraudsters from duping people.
While cryptocurrencies are rapidly developing, the Nepalese authorities have already identified measures to protect the financial system and avoid further misuse of digital assets.
