The Taliban regime has issued a blanket ban over the cryptocurrency industry in Afghanistan and has arrested those in defiance. The country’s central bank placed a national ban on digital currencies earlier this month.
The crackdown on cryptos is in response to the fact that many Afghans have resorted to storing their money in cryptocurrencies in order to protect it from the reach of the Taliban according to a senior official in the Afghan police that spoke to the news agency Bloomberg. Sayed Shah Sa’adat, head of criminal investigations at the police headquarters in Herat said:
The central bank gave us an order to stop all money changers, individuals, and businesspeople from trading fraudulent digital currencies like what is commonly referred to as Bitcoin.
Saa’dat added that 13 persons have been detained for defying the ban, although the majority of them were later freed on bail. More than 20 enterprises linked to cryptocurrencies have also been closed down in the city of Herat. Herat is Afghanistan’s third-largest city and is a center for dealing in cryptocurrencies. There are a total of six cryptocurrency brokerages in Afghanistan. After being cut off from the global financial systems due to sanctions imposed by the Taliban, the use of cryptocurrencies as a means of transferring money into and out of the country has been on the rise. The Taliban regime has closed down at least 16 cryptocurrency exchanges in the western Herat province.
Afghanistan becomes the second country in the world to announce a total ban on cryptocurrencies after China. The Taliban announced a ban on cryptocurrencies earlier this month, an occurrence predicted by some religious scholars. Experts feared that digital assets would be seen as “haram” – something forbidden to Muslims due to its characteristics of gambling and its uncertainty in the value. According to Bloomberg, in June, the central bank in the country also banned online foreign exchange trading because its spokesman views it as illegal and fraudulent. Sa’adat added:
Afghanistan’s Bank (central bank) stated in a letter that digital currency trading has caused lots of problems and is scamming people, therefore they should be closed. We acted and arrested all the exchangers involved in the business and closed their shops.
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