Kathmandu, Jan. 1
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.
Published in The Rising Nepal daily on 2 January 2026.
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