Taliban Ban Crypto in Afghanistan, Arrest Crypto Dealers

Written by on August 30, 2022

The Taliban has placed nationwide ban on cryptocurrencies and has begun arresting Afghans who defied the ban.

Head of criminal investigations at the police headquarters in Herat, Sayed Shah Saadaat, disclosed to Bloomberg that Afghanistan’s central bank imposed a nationwide ban this month. 

“The central bank gave us an order to stop all money changers, individuals, and businesspeople from trading fraudulent digital currencies like what is commonly referred to as Bitcoin,” Mr Saadaat said. 

According to him, the Taliban has released arrested crypto dealers after around a week in detention but has imposed a nationwide ban on digital assets citing scams and fraud.

On August 14, the Taliban forces raided a total of 16 local crypto exchanges in Herat, the third-largest city of Afghanistan, without prior notice, and arrested the cryptoasset dealers while also closing their businesses, according to reports by local media outlets.

The arrested crypto dealers were released late last week but were asked to cease all operations related to cryptocurrencies, the CEO of one of the local crypto exchanges, who asked to remain anonymous due to security concerns.

The CEO added that they received no prior warning and had no idea that the Taliban had banned cryptoassets. 

Afghans quickly adopted crypto to move money in and out of the country after the Taliban reclaimed Afghanistan. 

World powers shut the middle eastern government out of SWIFT, the global banking system, in line with sanctions levelled on the militant group. 

Last year, the data firm Chainalysis ranked Afghanistan 20 out of the 154 countries it evaluated in terms of their crypto adoption.

The United States stopped transfers of dollars to Afghanistan’s central bank and seized its $7.1 billion in assets. 

France and Poland-based firms with contracts to print Afghan currency also halted shipments following the start of the new regime in Afghanistan.

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