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Afghanistan authorities have shut down at least 16 cryptocurrency exchanges in Herat Province, according to a report by a local news outlet Ariana News. The move comes just a couple of months after Taliban-led Afghanistan banned crypto trading in the country.
Afghanistan Accuses Crypto Exchanges of Scam and Fraud
Afghanistan’s law enforcement officials have closed at least 16 cryptocurrency exchanges in the country’s Herat Province, citing scams and fraudulent activities. No exchanges were mentioned by name.
“Da 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.”
– Sayed Shah Sa’adat, head of the counter-crime unit of Herat police.
Herat Money Exchangers’ Union also claimed numerous users were scammed through crypto trading on these exchanges. Union head Ghulam Mohammad Suhrabi said crypto accounts “are outside the country and are purchased from the companies,” adding that it’s better for Afghanistan people not to use those currencies because they are not familiar with them.
The move comes just three months after Afghanistan authorities banned digital currency trading in the country. Furthermore, Afghanistan also banned Forex trading in the country in June, with the country’s central bank describing it as illegal and fraudulent.
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Taliban’s Crypto Clampdown Impedes Crypto Adoption
The crackdown on crypto in Afghanistan has been orchestrated by the Taliban, who have returned to power nearly 20 years after the United States military invaded the country and ousted them. While the Taliban takeover initially stimulated interest in cryptocurrencies among the residents, the recent sanctions have been making it increasingly difficult to buy digital assets in the country.
“Digital currency is a new phenomenon which is not used in Afghanistan, therefore the process should be monitored by the government so that there will be no scamming and people can make better investments.”
Police close crypto currency exchanges in Herat
According to Google trends data, the number of web searches for “bitcoin” and “crypto” was also on the rise prior to the Taliban takeover. Afghanistan was even named among the top 20 countries in Chainalysis’ report Global Crypto Adoption Index in 2021.
Overall, crypto adoption has been rising over the past few years, though it is safe to say it varies significantly from country to country. The U.S. market has witnessed several important deals in the past month that are expected to boost crypto adoption, including the BlackRock-Coinbase partnership that offers crypto exposure to institutional investors.
Do you think crypto adoption in Afghanistan will continue plummeting under its Taliban leaders? Let us know in the comments below.