Wednesday, 25 November, 2020
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Networking operators shifting to illegal cryptocurrency trade



networking-operators-shifting-to-illegal-cryptocurrency-trade

By Purushottam P. Khatri
Kathmandu, Nov. 21 :The business of cryptocurrency, which is considered illegal in Nepal as per Nepal Rastra Bank’s law, is still in practice in an organised way, police and the government officials claimed.
The transaction of virtual currency (cryptocurrency), which was banned in Nepal three years ago, has resurfaced after the public began to be deceived through Bitcoin transactions, the world’s first cryptocurrency.
According to the police investigation, the process of opening an account and making new members for transactions of cryptocurrency like in networking business has been intensifying on social media.
Few months ago, cryptocurrency transaction became 'viral' on social media as more and more members were added in networking business style for a virtual currency called 'pi' run by Pioneer Network in Nepal.
According to Deputy Inspector General (DIG) Sahakul Thapa, chief of the Central Investigation Bureau (CIB) of the Nepal Police, the government banned networking business in 2017 and the business of that nature and people involved in this network have now shifted to cryptocurrency business.
DIG Thapa said, "Currently, both networking business and cryptocurrency are banned in Nepal. Some people have turned to cryptocurrency business after the police cracked down on the networking business."
DIG Thapa said that the transaction of cryptocurrency was illegal and legal action would be taken against the trader.
Govt seeks CIB’s support
The Ministry of Industry, Commerce and Supplies has also initiated action against illegal transactions of cryptocurrency and digital currency in Nepal.
The Department of Commerce, Supplies and Consumer Protection had sent a letter to the Central Investigation Bureau (CIB) of Nepal Police on September 29, 2020 asking them to take action against cryptocurrency and digital currency traders.
According to Shivaraj Sedhai, spokesperson and director of the foreign trade regulation branch of the Department, the Department has written a letter to the CIB to take action against those involved in illegal trade of cryptocurrency and digital currency.
Director Sedhai said, "We had studied the illegal trade of cryptocurrency and digital currency in Nepal for some years now. We have written to the CIB for action after the involvement of nearly four dozen people was revealed."
In the letter to the CIB, the Department has sought support and help to nab and produce them in front of the Department.
The use of other digital currencies, including 'pi', on social media is on the rise and the Department is investigating the risk of fraud, said Director Sedhai.
The CIB was also investigating into the matter. Chief of the CIB, DIG Thapa, said that further investigation has been launched after receiving a letter from the Department.
"Once the evidence is available, the process will move ahead," DIG Thapa said.
According to police sources, the Department has requested the CIB to help arrest Govinda Shrestha, Ashok Neupane and Ratnakaji Shrestha of 'One Coin Digital Currency,' Gyanendra Khadka and Krishna Kumar Maharjan of 'Excel Token,' Bijay Shah and Dinesh Shah of Cash Coin and Parmananda Shrestha of Pi Network and produce them before the Department.
Prior to this, CIB had arrested seven people on October 4 and 5, 2017 on charge of trading cryptocurrency for the first time in Nepal. Police had detained them from Kathmandu and Chitwan.

Among the arrested were Gyan Prasad Poudel of Sindhuli, Madhav Khanal of Arghakhanchi, Prashant Pratap Shah of Kathmandu, Binda Dhakal of Kalanki, Kathmandu, Mingmar Tamang of Sindhupalchowk, Daman Basnet of Kathmandu and Manish Kumar Giri of Rupendehi. Also, on May 20, 2018, CIB had detained Bajra Singh Lama, a resident of Makalbari in Kathmandu, and permanent resident of Sindhupalchowk on the same charge.
According to DIG Thapa, they were arrested on the charge of trading cryptocurrency financial instruments including Bitcoin and Gravity Coin, which were declared completely illegal by the Nepal Rastra Bank.
The CIB had filed a case in the Kathmandu District Court on October 29, 2017 claiming Rs. 40 million. Even after three years, the case is pending. Nepal Rastra Bank (NRB) had issued the public notice on August 13, 2017 saying that Bitcoin trading was illegal.
According to the Nepal Rastra Bank Act, 2002 and the Foreign Exchange (Regulation) Act, 1962, Bitcoin is not legally recognised as a currency in Nepal.
What is cryptocurrency?
Cryptocurrency is a worldwide digital asset which works as medium of exchange for payment system virtually or any digital mode.
In this system, individual coin ownership records are stored in a ledger existing in the form of computerised database using strong cryptography to secure transaction records.
Today, more than 1,100 cryptocurrencies have been created such as Ethereum, Ripple or XRP, Litecoine, Monero, Dash, Zcash, Tether and Bitcoin Cash and are put in circulation and use.
Its use in Nepal is said to have started in 2013.

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