The Afghan law enforcement has closed down more than a dozen of the crypto exchanges located in Herat and detained their operators. This offensive follows the Taliban’s ban on foreign currency online.
Taliban Government Takes on Crypto Trading in Afghanistan Citing Scamming As Motive
According to the English-language Ariana News website, Afghan security forces shut down several crypto exchanges within the western Herat region in the last week. According to the unnamed outlet, at least 16 exchanges trading digital currencies were shut down.
The report quotes the head of the counter-crime unit of the Herat police Sayed Shah Sa’adat who reminded that Da Afghanistan Bank (DAB), the country’s monetary authority, said in a notice that crypto trading had caused lots of problems, including scamming people. He stated that:
We took action and arrested all exchangers who were involved in this business.
Ghulam Mohammad Suhrabi, who leads the Herat Money Exchangers’ Union, explained that Afghan companies open cryptocurrency accounts outside the country. “This currency is new in the market and has high fluctuation,” he noted.
Officials in Afghanistan are likely referring to statements made by Kabul’s central banking, which according to Bloomberg reports from June said that online Forex trading was prohibited and a violation of Islam. A spokesman for the regulator said that those involved in forex trading would be facing prosecution. The bank’s representative elaborated:
Da Afghanistan Bank believes online forex trading is illegal and fraudulent. Therefore, it has been banned.
Ariana News reports that DAB made another statement mid-July to reinforce the order. The bank stated that Afghans in particular were continuing to trade despite prohibition. According to the authority, no person or business was allowed to trade online without permission and any persons who do continue doing so are breaking the law.
Following the return of the Taliban to power in Kabul, Afghanistan’s weak economy fell into an even deeper crisis. The U.S., which pulled out its forces in 2021, seized $10 billion of DAB’s assets and imposed sanctions.
Due to financial restrictions, the Afghan diaspora was unable to send funds home due the withdrawals of Western companies. Cryptocurrency was the solution for many Afghans, who were able to save their money and avoid being confiscated by the government.
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