The central bank in Afghanistan has put a ban on cryptocurrencies this month alongside the Taliban arresting dealers who refused to stop trading digital tokens.
The clamp down on cryptocurrencies follows a boom in popularity among Afghans who allegedly hoped to hide their wealth from the Taliban.
Cryptocurrencies enabled young Afghans to make a living and avoid international sanctions imposed against the Taliban regime.
Head of criminal investigations at the police headquarters in Herat, Syed Ahmad Shah Saadat 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.”
While 13 people were arrested, most were then released on bail with a further 20 crypto-related businesses in Afghanistan’s third-largest city and trading hub, Herat, forced to close.
A report last year by Chainalysis listed Afghanistan among the top 20 countries worldwide for cryptocurrency adoption.
Several countries have been tightening regulations and laws surrounding cryptocurrencies since the market’s crash wiped more than $2tn off crypto investors and companies globally.
Like China, which declared a ban on all crypto transactions in September 2021, Afghanistan followed suit announcing an outright ban on digital assets.
The Taliban are allegedly looking into digital currencies and whether they are deemed as “haram” or forbidden in the eyes of Islamic law.
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