Afghan Authorities Arrest Crypto Traders, Shut 16 Exchanges

Afghan authorities arrested crypto traders and shut down 16 unnamed trading platforms in the country’s western Herat province in the past week, according to a report by Ariana News.

The move comes just three months after Afghanistan’s central bank imposed a ban on crypto trading in the country. The bank said crypto was banned because it caused a lot of problems and is being used in scamming people.

Afghanistan Crackdown on Crypto Exchanges

Sayed Shah Saadat, head of criminal investigations at the police headquarters in Herat, said the move to shut down the exchanges was taken in response to the ban.

“Da Afghanistan’s Bank (central bank) stated in a letter that digital currency trading has caused lots of problems and is scamming people, therefore they should be closed. We acted and arrested all the exchangers involved in the business and closed their shops.”

According to reports, the authorities also arrested about 13 people for trading in cryptocurrencies but have all been released on bail.

Afghans Turn to Crypto

Following the Taliban takeover in August last year and financial sanctions placed on the military group by the United States, getting money in and out of Afghanistan became difficult. To get quick access to funds and also safeguard their wealth, Afghans turned to crypto, which led to the increasing use of digital assets in the country.

However, the new government has remained hostile towards crypto as they believe the emerging asset class is used to carry out fraudulent activities.

Ghulam Mohammad Suhrabi, head of Herat Money Exchangers’ Union said:

“Digital currency accounts are outside the country and are purchased from the companies. Our people are not familiar with it, so it is better not to use it. This currency is new in the market and has high fluctuation [rates].” 

Meanwhile, in another report last week, the South Korean Financial Services Commission (FSC) launched a probe into 16 local crypto exchanges, including KuCoin and ZB.com for operating without the required registration in the country.