In Nepal, authorities have arrested three Indian nationals accused of engaging in cryptocurrency trading, revealing the possible illegal crypto trade happening through open borders, according to officials.
Last Thursday, police discovered three individuals from Rajasthan, India, at a hotel in Shivnagar Municipality, Kapilvastu, while they were allegedly involved in cryptocurrency transactions. The authorities said they were found trading virtual currency using an app, which has now been banned in India.
The local police reported that the Kapilvastu District Court extended the investigation period by seven days for further inquiry. Additionally, a separate investigation by the Central Bureau of Investigation (CBI) in Kathmandu led to the arrest of seven individuals on charges of organized fraud and involvement in cryptocurrency trading, with two of the arrested being from Bihar, India.
The three Indian nationals were arrested after the police discovered multiple mobile phones during a routine hotel check, which raised suspicion. Upon further investigation, it was found that they were using an app to conduct cryptocurrency transactions, an app that is banned in India but still operational in Nepal. The police believe that the individuals traveled to Nepal to carry out these activities, using this particular app that remains accessible in the country.
Authorities are now investigating which group, either Nepali or Indian, these individuals were targeting with their crypto transactions. The seized equipment from the three individuals included 24 mobile phones, a laptop, and six chargers. According to the police spokesperson for Kapilvastu, the suspects were using the MEEXC application for trading Bitcoin.
Meanwhile, the police have also uncovered a link between cryptocurrency trading and organized online fraud in Kathmandu, where two Indian nationals were arrested for their involvement in this network. The police spokesperson for the Central Bureau of Investigation, Sudhir Raj Shahi, mentioned that it appears Nepali individuals might have employed these foreign nationals as technical staff to support the illegal operations.
Shahi explained that such crimes, including online gambling and cryptocurrency trading, are often carried out in locations where the legal framework is either non-existent or still developing, making it easier for such activities to flourish.
The police also noted the growing challenge of controlling apps used in such illegal operations. With the rapid pace of technological advances, it has become increasingly difficult to track apps across different countries, as some apps are available in Nepal but not in India, and vice versa. The police are actively collaborating with regional and international authorities to share information and combat cybercrime and online fraud.
Experts say that the use of VPNs to conduct transactions makes it hard to trace these activities back to Nepal, despite the cryptocurrency trade happening within the country. Authorities have observed that cryptocurrency is also being used as a payment method for illegal gold trading in Nepal, further complicating the efforts to track illicit activities.