Youth, salaried employees vulnerable to ‘get-rich-quick’ virtual assets schemes

Kathmandu, Jan. 2: An analysis of the Financial Intelligence Unit at the Nepal Rastra Bank (NRB) revealed that 75 per cent of individuals suspected of involvement in Virtual Assets-related activities are between 21 and 35 years of age. Students (29 per cent) and salaried employees (21 per cent) constitute the largest occupational groups. 

Virtual assets are digital forms of value such as cryptocurrencies–such as Bitcoin and Ethereum–stablecoins, utility tokens, and other tokenized assets that can be traded, transferred, or used for payments and investments.

“This represents a critical vulnerability indicator. This digitally proficient demographic is disproportionately targeted by, and vulnerable to, online investment scams and ‘get-rich-quick’ schemes,” said the NRB in its Strategic Analysis Report, 2025 on Virtual Assets published on Thursday. 

According to it, this finding highlights a significant gap in financial literacy and consumer protection, underscoring the urgent need for targeted public awareness campaigns, particularly for young adults and students.

Key typologies observed in VA-related activities include illegal foreign exchange transactions, hundi, online fraud, disguising the true nature of business activities while engaging in cryptocurrency trading, and the use of money mules involving the bank accounts of family members and relatives.

The NRB informed that although the virtual assets related Suspicious Activity Report or Suspicious Transaction Report (SARs/STRs) at the concerned reporting agencies have shown a fluctuating trend, the number has gone up significantly in recent years. 

“Thirteen STRs/SARs were reported in 2021, rising sharply to 173 in 2022. The number declined to 138 in 2023 before increasing again to 252 in 2024,” read the report.

As of 16 July 2025, a total of 82 VA-related STRs/SARs have been reported.

A significant majority (91.19 per cent) of virtual asset (VA)-related STRs/SARs were reported by commercial banks. 

According to the NRB, this may be attributed to the use of bank accounts for VA-related activities, including the receipt of returns on virtual asset investments. 

The integration of all commercial banks into the goAML system (an electronic reporting and analysis platform used for anti–money laundering and counter-terrorist financing (AML/CFT) purposes) and the strengthening of suspicious transaction reporting mechanisms may also have contributed to the higher level of reporting.

Likewise, most VA-related STRs/SARs have been disseminated to the Nepal Police, followed by the Department of Revenue Investigation. The majority were forwarded to the Nepal Police, as they are responsible for investigating predicate offences such as the use of virtual assets and hundi-related activities. Only six cases were disseminated to the Department of Money Laundering Investigation (DMLI). 

The central bank said that while most analyses resulted in suspicion of the use of virtual assets, only a limited number of cases could be directly linked to money laundering through virtual assets.

VA-related STRs/SARs are primarily triggered by ongoing transaction monitoring conducted by banks and financial institutions (BFIs), as well as information received from informal sources, such as emails or screenshots indicating that a customer’s account is linked to VA-related applications like Binance. 

Other key drivers include direct enquiries from law enforcement and investigative agencies, and intelligence received from walk-in customers.

In a few instances, money mules were found to be unaware that their accounts were being used for VA-related activities or of the legal prohibitions governing such activities. 

The NRB said that some individuals were found to have misused dollar cards to purchase cryptocurrency, while others defrauded victims by persuading them to transfer funds in exchange for promised high returns through crypto or Bitcoin investments.

“As Nepal remains in the early stages of digitisation and technological adoption, other predicate offences and illegal activities—such as digital fraud, investment scams, online gambling and hundi—are increasingly intertwined with the use of virtual assets, making them more susceptible to money laundering, terrorist financing and proliferation financing risks,” read the report.

The continued rise in VA-related STRs, despite the legal ban on the use of virtual assets, suggests that restrictive measures alone are insufficient to mitigate these risks, concluded the NRB indicating to the need for a strategic shift—from a total prohibition towards enhanced detection, investigation and public awareness—to effectively manage the evolving threat, which is increasingly operating within the informal and illicit economy.

The report suggested that the reporting agencies should practice thorough monitoring of customer transactions and behaviour from deviations from expected patterns, particularly where virtual asset involvement is suspected. It also recommended for the timely update of the KYC (Know Your Customer) information, timely reporting, and regular training and public awareness. 

The NRB also stressed on the capacity building of the law enforcement agencies to enhance investigators’ skills, cross-agency information sharing and integration, enhancement of investigative tools and techniques, and forging foreign cooperation and partnerships.