Although virtual asset trading is completely banned in Nepal, there has been a significant increase in related activities in the last five years. Reporting of virtual asset-related activities appears to have increased by more than 19 times in 2024 compared to 2021.

In 2021, the National Bank received 13 such suspicious activity or transaction reports (complaints). By 2024, this number had increased to 252. According to the ‘Strategic Analysis Report on Virtual Assets’ released by the bank’s Financial Intelligence Unit on Thursday, a total of 658 reports on such transactions have been received in five years.

The National Bank said that 82 additional reports were received in the first six and a half months of 2025 (till July 16). The report said that virtual assets such as cryptocurrencies like Bitcoin and Ethereum, non-fungible tokens (NFTs) like digital art, digital photos and videos, security tokens and stable coins are being traded not only technically but also under the guise of daily banking transactions.

The report pointed out that 29 percent of those involved in such suspicious activities are students and 21 percent are salaried employees. This data shows that the young generation, accustomed to technology, is at high risk of online fraud and the temptation to get rich quick, and they lack financial literacy. According to the

report, in 26 percent of suspicious transactions, customers have written words like ‘Binance’, ‘USDT’, ‘Crypto’, ‘Bitcoin’, ‘Hyperfund’ in the details when sending or receiving money from the bank. In 42 percent of suspicious transactions, it has been found that money is deposited and withdrawn repeatedly through digital means between unknown people in a short period of time. Banks suspect that this is related to ‘virtual assets’.

In recent years, virtual assets and virtual asset service providers have been rapidly emerging, and although this technology is modern and useful, the current laws and mechanisms are finding it very difficult to prevent fraud and illegal activities caused by it, Vasudev Bhattarai, Director and Head of the Financial Information Unit, wrote in the ‘Introduction’ of the report.

‘In particular, it has introduced risks such as the anonymity of the person doing the transaction, the ease of sending money from one country to another and regulatory difficulties,’ he said, ‘It has added new challenges to the traditional financial system, supervision and law enforcement mechanisms.’

All activities related to virtual assets are prohibited in Nepal. However, the report has shown that such assets are being used in illegal activities such as hundi transactions, online financial fraud, online gambling and money laundering.

‘This report has made it clear that investigation, freezing/seizure and prosecution processes can be initiated against individuals or organizations directly or indirectly involved in such activities in accordance with the relevant laws,’ the Rastra Bank said in a statement. ‘Such activities seem to facilitate cross-border value transfers, layered transactions and concealment of illegal income by circumventing the formal financial system.’

The report shows that the majority of people involved in suspicious transactions related to virtual assets are from the younger generation. Of the 100 reports studied, 75 percent are between the ages of 21 and 35. Of these, 35 percent are between the ages of 26 and 30. Referring to the role of commercial banks in such activities, the report pointed out that out of a total of 658 suspicious reports received in five years, 600 were received from commercial banks.