Nepal to combat cryptocurrency fraud through public awareness and transaction monitoring

Nepal’s Financial Intelligence Unit (FIU) has found that cryptocurrencies are widely used to orchestrate cyber fraud, despite an official ban on trading digital assets. The FIU is a specialized unit under Nepal’s central bank tasked with monitoring and combating financial fraud, including money laundering and terrorist financing. In a “strategic analysis report” released on November 18, the FIU noted an increase in bad actors using cryptocurrencies to launder illicit funds. The report states that fraudsters often convert illicit funds into cryptocurrencies, which makes it difficult for authorities to track and recover the funds. In addition, Nepalese citizens are increasingly falling victim to scam cryptocurrency investment schemes. Fraudsters contact potential victims through social media or online ads, often promising unrealistically high returns. In many cases, the illegality associated with cryptocurrency transactions makes victims reluctant to report to the authorities. To combat the growing cyber threat, the FIU made two key recommendations: strengthening scrutiny of crypto transactions, and training financial institutions to identify red flags and report them promptly. (Cointelegraph)