Crypto-currency transaction on a rise

Gajendra Basnet

November 19, 2020


Crypto-currency transaction on a rise

KATHMANDU: Despite many legal provisions to restrict the transactions of cryptocurrency, its illegal transaction seems to boom in the country.

After reports of several people being misled and deceived by the bitcoin transaction, the government banned the virtual currency also known as cryptocurrency some three years ago.

The police investigation shows that the transaction of the crypto-currency has increased of late. Many people have opened accounts so that they can be part of crypto-currency.

Recently, the trend of adding members in the networking approach to get access to the virtual currency known as ‘pie’ had gone viral on social media.

According to DIG Sahakul Thapa, the Chief of Central Intelligence Bureau, a study shows that after the government banned networking business in 2017, those vying for earning easy money via networking business have shifted their mind towards crypto-currency.

“Networking business and crypto-currency both are banned in Nepal,” DIG Thapa told Khabarhub, “As the transaction of such currency is not valid in Nepal, we will take action as per law. We won’t spare anyone involved.”

Police searching those involved in the crypto-currency transaction

With the increase in the illegal transaction through crypto-currency and digital currency, the Ministry of Industry, Commerce and Supply has taken the initiation to curb the transaction of such currency.

The Department of Commerce, Supplies and Consumer Protection (DoCSCP) wrote to the Central Intelligence Bureau (CIB) on September 29 and sought help in nabbing those involved in the promotion of cryptocurrency and digital currency.

“After finding the increase in the transactions of prohibited crypto-currency and digital currency, we have returned to CIB urging it to take due action,” Shiva Raj Sedhain, the Director of Department’s Foreign Trade Regulation Division told Khabarhub. “We have traced the involvement of some people in it.”

CIB has already initiated the probe into the issue.

“After we received the letter from the DoCSCP, we have started the probe from another angle,” DIG Thapa said, “Once we get the evidence, we take action accordingly,”

The police source informed that the Department has asked it to produce Govinda Shrestha, Ashok Neupane and Ratna Kaji Shrestha of ‘Digital Currency’, Gyanendra Khadka and Krishna Kumar Maharjan of ‘Excel Token’, Bijaya Shah and Dinesh Shah of ‘Cash Coin’ and Paramananda Shrestha of ‘Pie Network’ before the Department for further action against them.

Details of people nabbed in crypto-currency transaction allegation

The CIB of Nepal Police nabbed seven alleged people of crypto-currency transactions.

Gyan Prasad Paudel, Madhav Khanal, Prashant Pratap Shah, Binda Dhakal, Mingmar Tamang, Daman Basnet and Manish Kumar Giri were arrested from Kathmandu and Chitwan on October 4 and October 5, 2017.

On May 20, 2018, the police nabbed a person Bajra Singh Lama from Makalbari, Kathmandu.

According to DIG Thapa, they all were arrested on allegation of carrying out foreign currency transactions illegally using the crypto-currency like bitcoin, gravity coin, etc.

The Nepal Rastra Bank Act 2002 has banned the use of crypto-currency declaring their use illegal.

The investigation showed that they had carried out the transaction worth one million to 1.2 million US dollars using cryptocurrency.

CIB filed a case in the Kathmandu District Court on October 29, 2017, claiming more than 40 million rupees as the principal amount. Even after three years, the case is being postponed on various ‘grounds’.

The claim goes like this:

Gyan Prasad Paudel: More than 22. 23 million rupees

Mingmar Tamang: More than 5.9 million rupees

Manish Kumar Giri: More than 336 thousand rupees

Binda Dhakal: More than 262 thousand rupees

Madhav Khanal and Sanjaya Khanal: Rs 52,550

Daman Basnet and Saugat Kumar Wagle: More than 450 thousand rupees

Bishwo Bikram Rai: 264 thousand rupees

Total: 40.96 million rupees

The Nepal Rastra Bank had issued a notice declaring ‘Bitcoin transaction illegal’ on August 13, 2017. 

Based on the legal provisions made on the Nepal Rastra Bank Act 2002 and the provisions on Foreign Currency (Regulation)Act 1962, NRB has declared all transactions through the crypto-currency void.

The ‘alleged’ made the government witness

Although the regulations seem to attempt to curb the bitcoin transaction as illegal, ironically, in some cases like the case related to eSewa, the prospective ‘alleged’ has been made the public witness in the crypto-currency transaction here.

At least, the public attorney’s office decision of July 2020 to appoint the ‘alleged’ company as the public witness made the people feel so.

Investigation on the issue, after considering the account of the alleged and the evidence available, found eSewa involved in executing transactions through crypto-currency.

Interestingly, Asgar Ali, the Executive Director of eSewa was appointed as an expert and public witness in the investigation of the allegation related to the illegal transaction through crypto-currency. It’s noteworthy that Ali is the IT specialist to Prime Minister KP Oli.

In other words, the company and the staffers who should have been the subject for prosecution in the illegal transaction of crypto-currency bitcoin was made the public witness by the public attorney’s office.

“Asgar Ali also should have been the subject for investigation if not prosecution,” a police official who had been the member of the team investigating the Bitcoin-related case told Khabarhub, “Unfortunately, he managed to get special amnesty, even police consulted the prospective alleged as the expert on the issue; the person who should have faced trial in the court was made public attorney’s expert for consultation.”