Nepal’s communist government seemingly deemed bitcoin trading operations illegal in the country this month, as the National Bank of Nepal recently issued an order that puts bitcoin exchange businesses on hold until regulations are conceived.
Given the order, seven individuals were arrested this week for running an illegal Bitcoin exchange operation in the country, as according to the Central Investigation Bureau (CIB) they were trading without the authorization of the agency’s Superintendent of Police (DSP), Jeevan Kumar Shrestha, violating the National Bank’s order.
The DSP told local press that this is the first incident the bureau dealt with regarding illegal bitcoin trading, and as such is the first cryptocurrency-related arrest following the bank’s order. According to reports, the suspects lived Kathmandu and Chitwan region, and are facing fines and jail sentences of about three years.
DSP Jeevan Kumar Shrestha stated:
“[The arrestees] have been kept in police custody. The traded amount will be discovered after further investigation.”
Nepalese bitcoin exchange Bitsewa shut down operations
As Bitcoin.com points out, Nepalese bitcoin exchange Bitsewa recently shut down operations due to the National bank’s order. Bitsewa was the country’s first bitcoin exchange, and in a Facebook post, it detailed that it worked hard to bring bitcoin to Nepal, but that the country’s government seemingly had other plans in mind. Notably, the post reads:
“Bitcoin is flourishing in countries like Japan, Korea, India, US, and others. While we live in a country where Bitcoin is labeled illegal and seen as a threat to the economy. We have no choice but to come to an end when we just barely started to take off. We have decided to officially shut down Bitsewa as per the official Bitcoin Ban Notice published by NRB.”
Nepal also has a LocalBitcoins website, but at press time there are only two buyers and no sellers. Bitcoin.com reported that the Nepalese government has previously spoken about regulating virtual currencies shortly and that its leaders have been researching cryptocurrencies for a while.
Given that the National Bank of Nepal ruled bitcoin trading illegal until regulations are conceived, bitcoiners in the country are currently facing a dire situation that will only be resolved once the country’s government manages to draft regulatory guidelines.