Afghanistan Closes Down 16 Cryptocurrency Exchanges and Arrests Operators

Afghanistan Closes Down 16 Cryptocurrency Exchanges and Arrests Operators – In the past week, Afghan security forces have shut down a number of cryptocurrency exchanges in the western Herat province, according to a story published on Tuesday by the English-language Ariana News portal. The site said that at least 16 platforms that traded digital currency had been closed.

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According to the report, Sayed Shah Sa’adat, the head of the Herat police’s counter-crime unit, reminded people that the Da Afghanistan Bank (DAB), the country’s monetary authority, stated in a notice that cryptocurrency trading has resulted in numerous issues, including people being duped. 

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He further said: “We acted and arrested all the exchangers involved in the business and closed their shops.”

The head of the Herat Money Exchangers’ Union, Ghulam Mohammad Suhrabi, said that Afghan businesses open cryptocurrency accounts outside of the country. He said, “This currency is new in the market and has high fluctuation.”

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The Kabul central bank reportedly issued a statement in late June banning internet FX trading, according to a Bloomberg report. The Afghan officials are likely referring to this statement. The agency issued a warning that anyone engaging in this activity will be prosecuted through a spokesman.

The representative of the bank made clear: “Da Afghanistan Bank considers online forex trading illegal and fraudulent, and there is no instruction in Islamic law to approve it. As a result, we have banned it.”

According to Ariana News, DAB released a new statement mid-July reinforcing the directive. The bank claimed that despite the restriction, Afghans continued to trade, particularly in the capital city. The authority highlighted that it had not granted any individual or business a license to trade online.

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Afghanistan Closes Down 16 Cryptocurrency Exchanges and Arrests Operators – When the Taliban took back control of Kabul, the already fragile Afghan economy deteriorated even further. The United States imposed sanctions and seized $10 billion of DAB’s assets before withdrawing its soldiers in 2021.

The Afghan diaspora found it more difficult to send money home due to financial constraints and the withdrawal of Western companies. As a result, many Afghans turned to cryptocurrencies, which also enabled them to protect their savings and avoid possible government seizure.

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