Taliban launch crackdown on crypto use in Afghanistan

The Taliban, an Islamic fundamentalist group, are cracking down on cryptocurrency traders in Afghanistan. Bloomberg media reported on Friday.

Sayed Shah Sa’adaat, a senior Afghan police official, spoke to Bloomberg about the crackdown.

Afghanistan’s economy has been suffering since late last year when the Taliban intervened on March 15th August 2021. Taliban capture has further plunged large parts of the country into poverty.

Following the Taliban takeover of the Afghan capital Kabul last year, Afghans turned to using cryptocurrencies as the old monetary system had ground to a halt.

The Taliban have the police under their control. In June, Afghanistan’s ruling Taliban group introduced a new uniform for its national police force, saying it would bring greater security to the conflict-torn nation.

Since returning to power, the Taliban have relied on their widely feared insurgent security force to maintain law and order across the country, amid persistent criticism that the lack of police uniforms and police training encourages men to break out engage in criminal activity or abuse of power.

Since their comeback, most bank branches have been closed and those that have been operating have seen long lines of customers trying to withdraw cash.

Foreign donations and payments were not possible through the banking system. As a result, transferring funds directly to someone’s bitcoin wallet became a more viable option.

However, a year later, the Taliban authorities are now cracking down on the local cryptocurrency market. So far, Taliban police have arrested 13 local crypto shop owners and shut down their cryptocurrency-related businesses.

Sa’adaat, the head of Herat Police’s crime-fighting unit, said more than 20 crypto-related businesses have been shut down in the country’s third-largest city, Herat, where three-quarters of the country’s crypto brokers are located.

According to Sa’adat, the Central Bank of Afghanistan banned cryptocurrency trading as the practice encouraged fraud.

“The central bank has ordered us to stop all money changers, individuals and business people from trading in fraudulent digital currencies like what is commonly referred to as bitcoin,” he explained.

Saadat said the crackdown was in response to some Afghans storing their money in cryptocurrency to keep it away from the Taliban.

In June, the Taliban-controlled central bank banned all online foreign exchange trading.

In February, the armed group announced it would discuss whether digital tokens could be allowed under Islamic financial customs.

However, religious experts had long predicted that the Taliban authorities would ban crypto because it contains aspects of gambling and insecurity that Muslims consider a sin.

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