Afghanistan’s Taliban Government Shuts Down Cryptocurrency Exchanges
The law
enforcement agencies in Afghanistan have shut down over a dozen crypto
exchanges in Herat, detaining the people who were running them. The raids follow the introduction of a ban on online foreign exchange trading that the
Taliban seems to have applied to crypto trading as well.
The Taliban Government Goes After Crypto Trading
Afghan
security forces have closed down several crypto exchanges in the Western Herat
province in the past week, the English-language Ariana News reported on
Tuesday. At least 16 platforms trading digital currencies have been shut down,
the news portal has revealed.
The
report quotes the Head of the Counter-Crime Unit of the Herat Police, Sayed
Shah Sa'adat, as having received a complaint from Da Afghanistan Bank (DAB),
the Monetary Authority of Afghanistan. DAB has issued a notice that crypto
trading has caused lots of problems, including scamming people. He also stated,
"We
acted and arrested all the exchangers involved in the business and closed their
shops."
Ghulam
Mohammad Suhrabi, who leads the Herat Money Exchangers’ Union, explained that
Afghan companies open cryptocurrency accounts outside the country. "This
currency is new in the market and has high volatility," he noted.
The Afghan officials are probably referring to a statement by the central bank in Kabul. According to a Bloomberg report in late June, the ban on foreign exchange trading was effective after it was declared that online trading is against the tenets of Islam. Through a spokesman, the regulator warned that anyone engaging in this activity would face prosecution.
"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."
DAB
issued another statement reinforcing the order in mid-July, reports Ariana
News. The bank said that Afghans in the capital city were still trading despite
the prohibition. The authority clarified that it had not licensed any person or
company to trade online and that those who continued to do so were violating
the law.
Afghanistan’s
weak economy fell into an even deeper crisis following the return of the
Taliban to power in Kabul. The U.S., which pulled out its forces in 2021,
seized assets of DAB estimated at USD 10 billion and imposed sanctions.
The
financial restrictions and the withdrawal of Western companies made it harder
for the Afghan diaspora to send money home. Many Afghans turned to crypto,
which also helped them to preserve their savings and prevent potential seizure
by the Taliban government.
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