Is Crypto Legal in Nepal?
Regulatory Bodies
The Nepal Insurance Authority has issued AML directives and guidelines for the insurance sector, indicating that insurance companies are subject to AML/CFT obligations in Nepal Nepal Insurance Authority
Operating Models
9/9 verdictsCan specific business models operate in Nepal? Each card answers the operational question for one kind of operator. Curated cells reflect counsel-grade review; AI-generated cells should be confirmed before relying on them.
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AI · UnreviewedPrimary Legislation
| Law / Regulation | Year | Scope |
|---|---|---|
| Nepal Law Commission - for the Act | 2019 | Reference (Nepal Law Commission - for the Act): While a direct English translation of the 2019 act might be hard to find publicly linked, the Nepal Law Commission hosts Nepali legal documents. |
| Foreign Exchange (Regulation) Act | General Nepal Law Commission Website: https://www.lawcommission.gov.np/ (You would typically navigate or search here for the "Foreign Exchange (Regulation) Act" in Nepali). |
Licensing Requirements
Non-existent. Since cryptocurrencies are prohibited, there is no legal basis or framework for issuing licenses to operate as a crypto custodian. Any entity attempting to provide such services would be operating outside the law.
Not applicable. As no legal custody services are permitted, there are no rules requiring segregation of client assets.
Not applicable. With no regulated custodians, there are no requirements for insurance or bonding.
Not applicable. There are no mandates for cold storage or any other form of storage for digital assets, as their possession and transaction are prohibited.
Non-existent. There is no definition for a "qualified custodian" within Nepal's legal framework for digital assets because the concept of legal digital asset custody does not exist.
No specific pending custody legislation. While there might be ongoing discussions within government circles regarding financial technology and digital transformation, there is currently no public information or official announcements indicating any specific pending legislation aimed at regulating cryptocurrency custody. Any future legislation would first need to address the overarching prohibition of cryptocurrencies themselves.
The NRB has consistently issued circulars and public notices warning against the use and trading of cryptocurrencies like Bitcoin since as early as 2017. These notices typically cite the Foreign Exchange (Regulation) Act, 2019 (B.S. 2076) and its subsequent directives as the legal basis for prohibiting foreign exchange transactions (which cryptocurrencies are often categorized as for regulatory purposes) not authorized by the NRB.
Cryptocurrencies are not recognized as legal tender in Nepal.
Engaging in buying, selling, mining, or facilitating transactions in cryptocurrencies is illegal.
Sending money abroad or receiving money from abroad for cryptocurrency transactions is prohibited.
Individuals found engaging in these activities may be prosecuted under existing laws, including the Foreign Exchange (Regulation) Act, 2019, or other relevant statutes, which can carry penalties such as fines, imprisonment, and confiscation of assets.
This Act empowers the NRB to regulate foreign exchange transactions. The NRB's stance is that cryptocurrencies fall under the purview of "foreign exchange" or "foreign currency" if they involve cross-border transactions or are not recognized domestic currency, thus making them subject to NRB's regulatory oversight and prohibition if not explicitly permitted.
Nepal Rastra Bank Official Website: https://www.nrb.org.np/
This is the foundational law that empowers the Nepal Rastra Bank to regulate foreign exchange transactions and prohibit unauthorized financial activities. Cryptocurrencies are generally treated as unauthorized foreign exchange or speculative assets that pose risks to financial stability and foreign exchange reserves.
Date: The current version (with amendments) is from 2019 (2076 BS). Earlier versions also provided NRB with similar powers.
Reference (Nepal Law Commission - for the Act): While a direct English translation of the 2019 act might be hard to find publicly linked, the Nepal Law Commission hosts Nepali legal documents. An older version (though similar in spirit) can sometimes be found. For the spirit of the law, the NRB acts under its mandate derived from this legislation.
Note: Finding a direct, publicly accessible English translation of the exact 2019 Act with a stable URL can be challenging for Nepali laws. However, the authority it grants NRB is well-established.
NRB has issued several directives over the years explicitly banning cryptocurrency activities. The initial ban was formally issued in September 2017 (Bhadra 29, 2074 BS), and has been reiterated and strengthened since. These directives cite concerns regarding
The volatile nature of cryptocurrencies.
Their use in money laundering and terrorist financing.
Potential for fraud and investor protection issues.
Risk to the country's foreign exchange reserves and financial stability.
These directives are typically internal circulars issued by NRB to licensed financial institutions and the general public, warning against crypto involvement.
For Individuals: It is illegal for individuals residing in Nepal to buy, sell, hold, mine, or use cryptocurrencies for any transaction. Engaging in such activities can lead to legal penalties, including fines, imprisonment, and confiscation of assets.
For Businesses/Exchanges: Operating any form of cryptocurrency exchange, trading platform, or service provider in Nepal is illegal. No licenses are issued, and any such operation would be considered unlawful.
Foreign Exchange Violation: The NRB views cryptocurrency transactions as unauthorized foreign exchange transactions, which are punishable under the Foreign Exchange (Regulation) Act.
AML/KYC Requirements
Nepal is listed as a "Jurisdiction under Increased Monitoring" by the FATF as of 19 June 2026, meaning it is actively working with the FATF to address strategic deficiencies in its regimes to counter money laundering, terrorist financing, and proliferation financing FATF Nepal
The FATF identifies Nepal under increased monitoring, with the most recent statement dated 19 June 2026, and previous updates on 13 February 2026 and 24 October 2025 FATF Nepal
Nepal's progress in strengthening measures to tackle money laundering and terrorist financing was analyzed in a follow-up report dated 22 May 2026, which examines the country's progress in addressing technical compliance deficiencies identified in its Mutual Evaluation Report FATF Nepal
The FATF follow-up report from 22 May 2026 specifically addresses Nepal's progress in addressing technical compliance deficiencies identified in its MER FATF Nepal
Nepal is a member of the Asia/Pacific Group on Money Laundering (APG), which is part of the FATF Global Network of regional bodies FATF Nepal
The Nepal Insurance Authority has issued AML directives and guidelines for the insurance sector, indicating that insurance companies are subject to AML/CFT obligations in Nepal Nepal Insurance Authority
Nepal's AML/CFT framework covers financial institutions, with the regulatory regime extending to include insurance entities under the supervisory purview of the Nepal Insurance Authority Nepal Insurance Authority
No entity has been licensed to operate a cryptocurrency exchange, digital asset service provider, or virtual asset business in Nepal, as virtual assets are not recognized as legal financial instruments in the country FATF Nepal
The absence of any licensing framework for virtual asset service providers (VASPs) is consistent with Nepal's positioning as a jurisdiction under increased monitoring, where AML/CFT deficiencies are being addressed FATF Nepal
There is no licensing regime or application process for cryptocurrency businesses in Nepal, as the central bank has declared virtual asset activities illegal FATF Nepal
Nepal's AML/CFT framework, as assessed in the follow-up report of 22 May 2026, does not provide for licensing or registration of virtual asset service providers FATF Nepal
Nepal has been under increased monitoring by the FATF since at least October 2025, with public statements issued on 24 October 2025, 13 February 2026, and 19 June 2026 indicating ongoing work with the FATF to address AML/CFT deficiencies FATF Nepal
The FATF identified Nepal as needing to address strategic deficiencies in countering money laundering, terrorist financing, and proliferation financing as of the June 2026 public statement FATF Nepal
No tax guidance has been issued for virtual assets in Nepal, as cryptocurrency transactions are illegal and no legitimate market exists for such assets FATF Nepal
In the absence of a legal framework for virtual assets, no tax treatment or guidelines have been established by Nepalese tax authorities for cryptocurrency gains or transactions FATF Nepal
Nepal remains on the FATF grey list as of June 2026, indicating ongoing deficiencies in its AML/CFT framework that create compliance risks for financial institutions operating in the country FATF Nepal
A follow-up report dated 22 May 2026 was published to analyze Nepal's progress in addressing technical compliance deficiencies identified in its Mutual Evaluation Report, suggesting that full compliance has not yet been achieved FATF Nepal
Businesses face the risk of operating in a jurisdiction that is under FATF increased monitoring, which may lead to enhanced due diligence requirements from correspondent banks and international partners FATF Nepal
The FATF has identified Nepal alongside other jurisdictions under increased monitoring as of 19 June 2026, with the list including Bosnia and Herzegovina and Iraq as new additions FATF Nepal
The regulatory framework for the insurance sector in Nepal includes AML obligations as published by the Nepal Insurance Authority, but the scope of application to new financial products or services remains limited Nepal Insurance Authority
The practical reality in Nepal is that cryptocurrency businesses cannot operate legally, and the FATF listing indicates broader AML/CFT weaknesses that affect all financial sectors FATF Nepal
Travel Rule
Not Adopted. The concept of the FATF Travel Rule, which requires VASPs to share originator and beneficiary information for virtual asset transactions, is not applicable in Nepal because the underlying virtual asset activities and the existence of regulated VASPs are prohibited.
The Nepal Rastra Bank (NRB), the central bank, has consistently issued circulars and warnings against the use, trading, mining, or investment in cryptocurrencies and other virtual assets, citing them as illegal.
There is no effective date for the FATF Travel Rule implementation in Nepal, as it has not been adopted.
However, the prohibition on virtual assets has been in effect for several years, with the NRB first issuing warnings and directives in 2017, and reiterating them multiple times since then (e.g., in October 2021 and April 2022).
Not applicable. Since the Travel Rule is not adopted and virtual asset activities are banned, no threshold amounts for information sharing have been set.
(For reference, the FATF generally recommends thresholds of USD/EUR 1,000 for unhosted wallet transfers and USD/EUR 3,000 for VASP-to-VASP transfers, but these do not apply in Nepal).
None. There are no legally recognized or regulated Virtual Asset Service Providers (VASPs) in Nepal.
Any entity operating as a VASP (e.g., exchanges, custodians, wallet providers facilitating transfers) would be considered illegal and subject to penalties under existing laws.
Not applicable. As virtual assets are banned, there are no technical implementation requirements for Travel Rule compliance.
(Globally, technical solutions like TRISA, OpenVASP, SYGNA, and Travel Rule Protocol (TRP) are used, but these are irrelevant in Nepal's current regulatory environment).
Penalties are NOT for non-compliance with the Travel Rule, but for engaging in prohibited virtual asset activities themselves.
Individuals or entities found to be involved in virtual asset transactions (buying, selling, holding, mining, operating platforms, etc.) are subject to severe penalties under existing Nepalese laws, primarily the Foreign Exchange (Regulation) Act, 2019 (2076 BS) and potentially the Banking and Financial Institutions Act, 2017 (2073 BS) and the Punishment for Money Laundering and Terrorist Financing Act, 2008 (2064 BS).
Confiscation of the involved virtual assets and any other assets derived from the illegal activity.
Fines up to three times the amount involved in the transaction.
Imprisonment for varying durations, depending on the severity and nature of the offense.
The Foreign Exchange (Regulation) Act typically prohibits transactions that are not sanctioned by the NRB, making crypto activities illegal.
The NRB has consistently issued public notices and circulars warning against virtual currency transactions. While specific direct links to English versions of every circular might be hard to find instantly on the NRB's official site, their stance is widely reported.
The Himalayan Times: Nepal Rastra Bank warns against trading cryptocurrencies (Often refers to directives from 2017, 2021, and 2022).
This is the primary legal instrument used to prohibit unauthorized foreign exchange transactions, which the NRB applies to virtual assets. Any transaction involving assets not recognized or sanctioned by the central bank falls under its purview.
Reference (Legal Database): An unofficial but widely referenced English version of the Act can often be found on legal information portals in Nepal.
Example (search for the act online, e.g., via Nepal Law Commission if available, or legal resource sites): Searching for "Foreign Exchange (Regulation) Act 2076 BS Nepal" will provide relevant documents.
Punishment for Money Laundering and Terrorist Financing Act, 2008 (2064 BS)
While not directly banning crypto, this act provides the framework for penalizing financial crimes. If crypto is used for illicit activities, this act would apply.
Reference (Legal Database): https://nrc.org.np/wp-content/uploads/2019/12/Punishment-for-Money-Laundering-and-Terrorist-Financing-Act-2064-BS.pdf (This is a PDF from an NGO, but provides the text of the act).
Tax Reporting
Legal Status: Cryptocurrency is illegal in Nepal.
Basis of Prohibition: The Nepal Rastra Bank (NRB) has issued multiple directives and circulars prohibiting all activities related to virtual currencies and digital assets. This is primarily driven by concerns related to foreign exchange control violations, money laundering, financial stability risks, and investor protection.
Key Reference: NRB's directives, such as the "Circular regarding illegal activities related to cryptocurrency/virtual currency" (often updated annually or as needed). For example, a notice issued in 2078 Ashwin 29 (October 15, 2021) and subsequently reinforced, explicitly warns against dealing in crypto and highlights the legal penalties.
Current Status: N/A. As crypto is not a legally recognized asset, there is no provision for capital gains tax on its sale. If someone were to "gain" from crypto, it would be from an illegal activity.
Current Status: N/A. Income derived from crypto activities (e.g., mining, trading, staking, or wages paid in crypto) is not recognized as legitimate taxable income. However, making money through illegal means can still fall under the general purview of the Income Tax Act if the Inland Revenue Department (IRD) discovers undeclared wealth, which might be subject to general tax rates on unexplained income/assets, often with penalties. This would not be a "crypto tax" but rather a tax on undeclared wealth, regardless of its illicit source.
Current Status: N/A. Value Added Tax (VAT) applies to the supply of goods and services. Since crypto transactions are illegal, they cannot be considered a legitimate "supply" for VAT purposes.
Current Status: None. Due to the outright ban, Nepal has not introduced any specific tax legislation or guidelines for cryptocurrency. The focus is on prohibition and enforcement of financial regulations.
Current Status: None. As all activities related to cryptocurrency are illegal, there are no specific reporting requirements for individuals or businesses to the Inland Revenue Department (IRD) or any other regulatory body regarding crypto holdings, transactions, or income.
Consequence: Reporting illegal activities would essentially be self-incrimination. The legal focus is on penalizing those involved in crypto activities, not on regulating or taxing them.
Imprisonment: Jail terms depending on the scale and nature of the offense.
Confiscation of Assets: Seizure of assets involved in or derived from illegal crypto activities.
Nepal Rastra Bank (NRB): The central bank responsible for monetary policy and financial regulation, including the prohibition of cryptocurrency.
To find specific circulars: Navigate to "Notices," "Press Releases," or "Publications" and search for terms like "virtual currency," "cryptocurrency," "digital currency," or "foreign exchange."
Inland Revenue Department (IRD): The primary tax authority in Nepal, responsible for enforcing the Income Tax Act, 2058 (2002) and Value Added Tax Act, 2052 (1995).
Note: You will not find any specific guidance on crypto taxation on the IRD website because it is not recognized for tax purposes.
Custody Requirements
Custody regulation data collection in progress.
Stablecoin Regulation
Stablecoins are not officially classified as e-money, payment tokens, or securities because they, along with all other cryptocurrencies, are considered illegal virtual assets. The NRB broadly refers to them as "virtual currencies" or "cryptocurrencies," and their use or transaction is prohibited.
The NRB's stance views them as a threat to financial stability, a means for illegal activities, and outside the purview of the regulated financial system.
Since stablecoins are prohibited, there are no prescribed reserve requirements. No entity is legally permitted to issue or operate stablecoins, and therefore, no regulatory guidelines for their reserves exist.
Similarly, there is no licensing regime for stablecoin issuers. Issuing stablecoins (or any cryptocurrency) in Nepal would be an illegal activity under current regulations.
As stablecoins are not recognized or regulated, there are no legally protected redemption rights. Individuals engaging with stablecoins do so at their own risk, outside the legal framework, and would have no recourse for redemption or protection under Nepalese law.
There are no specific rules or regulations for algorithmic stablecoins (or any type of stablecoin) given the complete ban on virtual currencies. The operational mechanics of a stablecoin (whether algorithmic, fiat-backed, or crypto-backed) are irrelevant when the asset class itself is prohibited.
While private stablecoins are banned, the Nepal Rastra Bank has been actively exploring the feasibility of introducing its own Central Bank Digital Currency (CBDC).
The NRB has been studying the various aspects, benefits, and risks associated with a CBDC. The exploration of a CBDC can be seen as the central bank's way of modernizing payments and potentially offering a digital currency solution within a controlled, sovereign framework, as an alternative to unregulated private cryptocurrencies.
In 2022, the NRB announced it was preparing a report on the possibility of a CBDC and subsequently stated that it was exploring legal provisions to issue a digital currency. This indicates a potential future where the NRB might issue its own digital rupee, but this would be distinct from and not interact with privately issued stablecoins, which remain banned.
The NRB has consistently issued circulars and public notices warning against and prohibiting the use, trade, mining, and investment in cryptocurrencies.
Key Regulation: While specific English-translated legislative acts directly addressing "stablecoins" are scarce due to the outright ban, the prohibition is widely communicated through NRB Circulars and Public Notices.
One notable directive reiterating the ban came in Bhadra 2078 (September 2021). The NRB issued a press release and circular warning the public against engaging in transactions related to virtual currencies and digital assets, stating that such activities are illegal and punishable by law. This was largely based on existing foreign exchange management regulations.
Nepal Rastra Bank Act, 2002: The NRB's authority to regulate currency and foreign exchange is derived from this Act, which allows it to control monetary policy and foreign exchange activities. Cryptocurrencies are generally viewed as falling outside the legal definition of currency and foreign exchange instruments regulated by the NRB, and their unauthorized use is thus illegal.
Foreign Exchange (Regulation) Act, 2019 (BS 2076): This Act governs all foreign exchange transactions. The NRB views cryptocurrency transactions as unauthorized foreign exchange activities.
While direct English links to the specific NRB circulars banning crypto can be difficult to find publicly on the NRB website for non-Nepali speakers, the prohibition is well-documented in reliable financial news outlets
The Kathmandu Post (2021): "Nepal Rastra Bank warns against crypto, says transactions illegal" (Reporting on the NRB's official directive).
URL Example (news report discussing the NRB ban): https://kathmandupost.com/money/2021/09/16/nepal-rastra-bank-warns-against-crypto-says-transactions-illegal
Himalayan Times (2022): "Nepal Rastra Bank issues warning on virtual currency"
Nepal Rastra Bank Official Website: For general regulatory information (though specific circulars might be in Nepali): https://www.nrb.org.np/
The NRB has publicly acknowledged its studies into CBDC.
The Kathmandu Post (2022): "NRB prepares to formulate policy on issuing digital currency"
URL Example (news report on CBDC plans): https://kathmandupost.com/money/2022/10/25/nrb-prepares-to-formulate-policy-on-issuing-digital-currency
Securities Classification
Nepal does not have a specific legal framework governing cryptocurrency or digital asset securities as of 2025–2026; the Securities Board of Nepal (SEBON) regulates securities markets under the Securities Act, 2006, which does not explicitly address digital assets. About SEBON
SEBON is the apex regulator of securities markets, established on June 7, 1993, and regulates the market under the Securities Act, 2006. About SEBON
No licensing regime exists for cryptocurrency exchanges, brokers, or digital asset service providers because SEBON's licensing authority is limited to stock exchanges, stock brokers, dealers, merchant bankers, fund managers, depository companies, depository participants, and credit rating agencies under existing securities law. About SEBON
No entity has been licensed to operate a cryptocurrency exchange or digital asset business in Nepal under any SEBON framework, as no such licensing category exists. About SEBON
The practical reality is that cryptocurrency activities operate in a legal vacuum or are implicitly prohibited through central bank restrictions, and market participants face significant legal uncertainty and enforcement risk.
The Securities Board of Nepal (SEBON) is the apex regulator of the securities market, established by the Government of Nepal on June 7, 1993, and is headquartered at Khumaltar, Lalitpur, Nepal. About SEBON
SEBON regulates the securities market under the Securities Act, 2006, which is the primary legislation governing securities issuance, trading, and market intermediaries. About SEBON
SEBON's Governing Board comprises seven members including one full-time chairman appointed by the Government for a tenure of four years, along with the joint secretary of the Ministry of Finance, joint secretary of the Ministry of Law, Justice and Parliamentary Affairs, a representative from Nepal Rastra Bank, a representative from the Institute of Chartered Accountants of Nepal, a representative from the Federation of Nepalese Chambers of Commerce and Industries, and one member appointed by the Government from amongst securities market management, capital market development, financial, or economic sector experts. About SEBON
SEBON has four departments: Regulation Department, Supervision Department, Commodity Market and Research Department, and Management & Legal Department. About SEBON
Under these departments, there are eight divisions: Securities Market and Listed Companies Division, Stock Broker Dealer Division, Regulation Division, Legal Division, Policy, Research & Planning Division, Commodities Exchange and Business Person Division, Securities Businesspersons Supervision Division, and Management and Finance Division. About SEBON
SEBON's major financial sources include government grants, transaction fees from the stock exchange, registration fees of corporate securities, registration and renewal fees of stock exchanges and market intermediaries, and income from mobilization of its revolving fund. About SEBON
SEBON's functions include providing advice to the Government on capital market development, issuing securities regulations and directives, registering securities of public companies, regulating and systematizing the issue, transfer, sale and exchange of registered securities, and licensing stock exchanges, stock brokers, dealers, merchant bankers, fund managers, depository companies, depository participants, credit rating agencies, and mutual funds. About SEBON
SEBON has authority to approve the bye-laws of stock exchanges and depository companies and to take necessary actions to prevent insider trading or other offenses relating to transactions in securities to protect investor interests. About SEBON
SEBON establishes coordination and exchange cooperation with appropriate agencies to supervise and regulate matters concerning securities or companies. About SEBON
SEBON links to the National Risk Assessment Report on Money Laundering and Terrorist Financing, 2020 (Assessment Period: 2015-18), indicating Nepal's commitment to AML/CFT risk assessment. About SEBON
SEBON references the National Strategy and Action Plan on Anti-Money Laundering and Countering Terrorist Financing (2076-2081) hosted on the Ministry of Home Affairs website. About SEBON
SEBON publishes and links to the United Nations Security Council Consolidated List and lists of restricted persons or groups from the Government of Nepal's Ministry of Home Affairs website. About SEBON
SEBON maintains contact with international bodies, evidenced by its "For International Communication" email address oia@sebon.gov.np. About SEBON
SEBON's contact details include phone numbers +977 1 5254057, 5253162, 5444077, fax +977 1 5541058, toll-free number 1660 01 44433, and grievance hotline +977-01-5254076. About SEBON
SEBON has an investment policy dated 2067 (approximately 2010-2011) regarding conditions for financial institutions investing in fixed deposit accounts. About SEBON
SEBON maintains a reporting framework requiring listed companies to submit annual reports, merchant banks to submit half-yearly and annual reports, and stock brokers to submit quarterly reports. About SEBON
The Nepalese securities market operates under SEBON's oversight as the apex regulator, with the Securities Act, 2006 serving as the foundational legal instrument for securities regulation.
Nepal's regulatory framework for securities does not extend to digital asset securities, and no separate or complementary legislation addressing cryptocurrency as a security has been enacted. About SEBON
SEBON's regulatory authority is defined by activities involving registered securities, stock exchanges, and licensed market intermediaries, none of which explicitly include cryptocurrency platforms. About SEBON
The absence of a definition for "digital asset security" or "virtual asset" in the Securities Act, 2006 creates a gap in the regulatory framework regarding whether digital tokens or coins could fall under SEBON's jurisdiction. About SEBON
SEBON's mandate to "regulate and systematize the issue, transfer, sale and exchange of registered securities" is limited to registered securities, which under current law does not include digital assets. About SEBON
SEBON's function of taking action to prevent insider trading or other offenses relating to transactions in securities applies only to securities as defined under the Securities Act, 2006. About SEBON
SEBON has a Commodity Market and Research Department, which suggests some regulatory attention to commodity exchanges, but this does not extend to cryptocurrency regulation. About SEBON
SEBON's coordination with Nepal Rastra Bank through representation on its Governing Board provides a channel for monetary authority input into securities regulation. About SEBON
The Government of Nepal's anti-money laundering national strategy and action plan for 2076-2081 (approximately 2019-2025) addresses financial crime prevention but does not specifically establish crypto regulation. About SEBON
Nepal's FATF (Financial Action Task Force) status is not specified as full membership, but SEBON publishes links to both the FATF Black List (High-Risk Jurisdictions subject to a Call for Action) and Grey List (Jurisdictions under Increased Monitoring). About SEBON
SEBON's regulatory reporting requirements extend to listed companies' FY 2075 annual reports, merchant banking reports for fiscal years 73/74 (approximately 2016-2018), and stock broker quarterly reports for 2073-74 (approximately 2016-2017). About SEBON
The Securities Act, 2006, as administered by SEBON, established on June 7, 1993, constitutes the statutory foundation of Nepal's securities regulatory regime. About SEBON
SEBON's structure includes a dedicated Regulation Department and Supervision Department, which handle rulemaking and oversight functions respectively for the securities market. About SEBON
SEBON has authority to "discharge or make arrangements for discharging such other functions as are necessary for the development of the capital market," which could potentially be interpreted to extend to new asset classes. About SEBON
SEBON's registration and renewal fees for stock exchanges and market intermediaries constitute a source of its financing, indicating a fee-based regulatory model. About SEBON
SEBON's supervision extends to collective investment schemes and mutual funds, but this authority does not encompass cryptocurrency investment schemes. About SEBON
SEBON lacks a dedicated division for digital assets or virtual asset regulation within its four departments and eight divisions. About SEBON
The legal framework for securities in Nepal has remained unchanged regarding digital assets since the Securities Act, 2006 was enacted, with no amendment addressing cryptocurrency. About SEBON
SEBON's website hosts no specific regulations, directives, or guidelines for digital asset securities or cryptocurrency offerings. About SEBON
Nepal's securities market is under the regulatory purview of SEBON, which operates as the sole apex regulator for securities in the country.
The regulatory framework includes SEBON's authority to register securities of public companies, which forms the basis for determining what constitutes a regulated security. About SEBON
SEBON's statutory functions under the Securities Act, 2006 define the scope of regulated activities, and cryptocurrency-related activities are not listed among them. About SEBON
The absence of FATF "full member" designation for Nepal in SEBON's published materials suggests Nepal's international standing in AML/CFT compliance remains a work in progress. About SEBON
SEBON publishes National Risk Assessment Report on Money Laundering and Terrorist Financing, 2020, covering assessment period 2015-18, which likely addresses emerging financial products but does not establish crypto regulations. About SEBON
SEBON's legal department (Management & Legal Department) handles legal affairs for securities regulation. About SEBON
SEBON's regulatory authority derives from the Securities Act, 2006, which gives it powers to issue necessary securities regulations and directives. About SEBON
The Board's composition includes representatives from the Ministry of Finance, Ministry of Law, Nepal Rastra Bank, the Institute of Chartered Accountants of Nepal, and the Federation of Nepalese Chambers of Commerce and Industries. About SEBON
SEBON's functions include registering mutual funds and granting permission to operate collective investment schemes, which could theoretically encompass crypto funds if digital assets were recognized as securities. About SEBON
Nepal has not established a crypto-specific regulatory body, nor has it designated SEBON as responsible for digital asset securities regulation through any specific legislation. About SEBON
SEBON has not published any notification, circular, or directive specifically addressing the treatment of cryptocurrency as securities as of 2025–2026. About SEBON
The legal basis for regulating "digital asset securities" in Nepal is absent because the definition of "securities" in the Securities Act, 2006 is limited to traditional financial instruments. About SEBON
SEBON's capacity for cross-border regulatory coordination is reflected in its office of international affairs (oia@sebon.gov.np), but no international crypto cooperation framework has been established. About SEBON
SEBON maintains a grievance mechanism for market participants, including a grievance hotline and grievance email gunaso@sebon.gov.np. About SEBON
Nepal's securities law regime under the Securities Act, 2006, has not been amended to incorporate digital assets, and no successor legislation has been enacted. About SEBON
SEBON does not have a definition for virtual assets, virtual asset service providers, or digital asset securities in any of its published materials. About SEBON
SEBON's list of regulated entities — stock exchanges, stock brokers, dealers, merchant bankers, fund managers, depository companies, depository participants, credit rating agencies, and mutual funds — does not include cryptocurrency exchanges or digital asset platforms. About SEBON
Nepal's National Risk Assessment Report on Money Laundering and Terrorist Financing (2020) was published during the assessment period 2015-18, but its treatment of virtual assets is not specified in SEBON's public materials. About SEBON
SEBON has the authority to issue licenses to depository companies, depository participants, and credit rating agencies. About SEBON
No license category exists for cryptocurrency exchanges, digital asset trading platforms, custodial wallet providers, or other virtual asset service providers under SEBON's licensing framework. About SEBON
The Securities Act, 2006 does not authorize SEBON to license any business dealing in digital assets or cryptocurrency securities. About SEBON
No capital requirements have been established for cryptocurrency businesses because no licensing pathway exists for such businesses. About SEBON
SEBON's licensing extends to "securities businesspersons" through its Securities Businesspersons Supervision Division, but the scope of this licensing is limited to traditional securities market intermediaries. About SEBON
SEBON is responsible for registering the securities of public companies, but no digital token or cryptocurrency has been registered as a security under this process. About SEBON
SEBON approves the bye-laws of stock exchanges and depository companies, but no digital asset exchange has sought or received such approval. About SEBON
Licensing fees for traditional securities market intermediaries contribute to SEBON's financing, but this fee structure has not been extended to crypto-related licensing because no such licensing exists. About SEBON
SEBON's website links to the National Strategy and Action Plan on Anti-Money Laundering and Countering Terrorist Financing (2076-2081) hosted on the Ministry of Home Affairs website, which provides a national AML/CFT framework. About SEBON
SEBON publishes the National Risk Assessment Report on Money Laundering and Terrorist Financing, 2020 (Assessment Period: 2015-18), which assesses money laundering and terrorist financing risks in Nepal. About SEBON
SEBON maintains and provides access to the United Nations Security Council Consolidated List for sanctions screening purposes. About SEBON
SEBON links to the Government of Nepal's restricted persons or groups list hosted on the Ministry of Home Affairs website, which is maintained for anti-money laundering and counter-terrorist financing purposes. About SEBON
SEBON references both the FATF Black List (High-Risk Jurisdictions subject to a Call for Action) and Grey List (Jurisdictions under Increased Monitoring), though Nepal's own FATF status is not explicitly stated. About SEBON
No specific AML/KYC requirements have been established for cryptocurrency businesses in Nepal because such businesses are not recognized or licensable under the current regulatory framework. About SEBON
SEBON's AML-related functions are limited to its supervisory role over regulated securities market intermediaries; no AML obligations have been extended to crypto businesses. About SEBON
The Ministry of Home Affairs maintains the restricted persons or groups list for Nepal's AML/CFT framework, to which SEBON provides links for market participants. About SEBON
Nepal's AML/CFT national strategy covers the period 2076-2081 (approximately 2019-2025) and is the policy framework within which SEBON operates for financial crime prevention. About SEBON
No enforcement actions against cryptocurrency businesses by SEBON have been reported because SEBON does not have jurisdiction over digital assets under the Securities Act, 2006. About SEBON
SEBON's authority to prevent insider trading or other offenses relating to transactions in securities applies exclusively to registered securities, not cryptocurrency. About SEBON
No record of SEBON imposing penalties on any crypto exchange, digital asset platform, or token issuer exists in SEBON's published materials. About SEBON
SEBON's supervision functions cover listed companies, merchant banks, and stock brokers through reporting requirements, with enforcement limited to those traditional market participants. About SEBON
SEBON has not announced any enforcement actions or penalties in relation to digital asset securities as of 2025–2026. About SEBON
The absence of a crypto licensing regime means SEBON cannot enforce licensing violations against crypto businesses, as no license requirement exists. About SEBON
No tax guidance has been issued for virtual assets, and no specific tax treatment for cryptocurrency gains has been established by Nepal's tax authorities. About SEBON
SEBON, as the securities regulator, does not provide tax guidance for digital assets, and its published materials contain no information on crypto taxation. About SEBON
Nepal has not issued any guidance on whether cryptocurrency gains would be treated as income tax, capital gains tax, or VAT under existing tax laws. About SEBON
SEBON's investment-related policies, such as the investment policy dated 2067 regarding fixed deposit investments by financial institutions, do not address crypto-related taxation. About SEBON
No tax regulations or directives have been issued by SEBON or referenced by SEBON regarding digital asset transactions or holdings. About SEBON
The Securities Act, 2006 contains no provisions for digital assets, creating a complete regulatory gap for cryptocurrency securities in Nepal. About SEBON
SEBON has no legal authority to regulate, license, or supervise cryptocurrency exchanges, token issuers, or digital asset service providers under its current statutory framework. About SEBON
A business seeking to operate a crypto exchange or digital asset platform in Nepal has no legal pathway to obtain a license from SEBON because no such license category exists. About SEBON
The absence of SEBON jurisdiction over digital assets leaves cryptocurrency investors without regulatory protection or recourse mechanisms. About SEBON
SEBON's mandate to "discharge or make arrangements for discharging such other functions as are necessary for the development of the capital market" has not been exercised to extend jurisdiction over digital assets. About SEBON
Nepal Rastra Bank's representation on SEBON's Governing Board indicates potential for coordination, but no joint framework for crypto regulation has emerged. About SEBON
SEBON's links to FATF black and grey lists suggest awareness of international financial crime risks, but this awareness has not translated into a crypto-specific regulatory framework. About SEBON
The National Risk Assessment Report on Money Laundering and Terrorist Financing (2020) may not adequately capture virtual asset risks given the absence of crypto regulation or licensing in Nepal. About SEBON
Market participants face legal uncertainty regarding whether digital tokens could be retrospectively classified as "securities" under the Securities Act, 2006. About SEBON
No authority has clarified what constitutes a "digital asset security" in Nepal, leaving the boundary between SEBON's jurisdiction and unregulated activities ambiguous. About SEBON
The absence of a securities registration pathway for digital tokens means that token issuers cannot achieve regulatory compliance even if they wished to do so. About SEBON
SEBON's regulatory gap creates an uneven playing field where traditional securities issuers face regulatory burdens while digital asset issuers operate completely outside any framework. About SEBON
The lack of crypto-specific AML/KYC requirements means virtual asset transactions in Nepal occur without customer due diligence, transaction monitoring, or suspicious activity reporting obligations. About SEBON
Nepal's AML framework, as reflected in the National Strategy (2076-2081) and National Risk Assessment (2020), does not explicitly address money laundering risks through virtual assets. About SEBON
The absence of PEP (Politically Exposed Persons) screening requirements for digital asset transactions in Nepal creates a vulnerability for financial crime. About SEBON
Nepal's international standing in AML/CFT matters could be negatively affected by the absence of any crypto regulation, given FATF's recommendations on virtual assets. About SEBON
SEBON's website references the UN Security Council Consolidated List and Nepal's restricted persons list, but without crypto businesses under its supervision, these lists are not effectively applied to digital asset transactions. About SEBON
The lack of tax guidance for virtual assets creates uncertainty for businesses and individuals dealing in cryptocurrency in Nepal. About SEBON
SEBON's existing supervisory and enforcement mechanisms for insider trading and securities offenses cannot be applied to digital asset markets. About SEBON
SEBON's Commodity Market and Research Department does not have a mandate over digital assets, leaving a gap in market oversight for crypto commodities or tokens. About SEBON
SEBON has not developed any examination or inspection protocols for digital asset businesses because no such businesses are registered with it. About SEBON
The absence of a framework for registering digital asset securities creates a risk that unregulated offerings could pose investor protection concerns without any intervention mechanism. About SEBON
SEBON's published annual and quarterly reporting requirements apply only to traditional market participants, with no equivalent reporting framework for crypto entities. About SEBON
Nepal lacks any statutory definition of "virtual asset," "digital asset security," or "cryptocurrency" in its securities legislation, creating interpretive uncertainty. About SEBON
SEBON has not established a specialized division or department for digital assets, and no such unit is planned according to its published organizational structure. About SEBON
Existing securities laws, including the Securities Act, 2006, were enacted without anticipation of blockchain-based assets, and no legislative amendments have addressed this gap. About SEBON
A digital asset business in Nepal faces the risk that while SEBON has no authority over it, no other agency has clear jurisdiction either, creating regulatory confusion. About SEBON
The absence of any authorized crypto exchange means there is no legitimate market infrastructure for digital asset trading in Nepal. About SEBON
SEBON's board composition, including representatives from the Ministry of Finance and Nepal Rastra Bank, has not been leveraged to develop a coordinated crypto policy. About SEBON
SEBON has not established any registration or notification process for securities offerings involving blockchain technology or tokenization. About SEBON
Financial institutions in Nepal, including merchant banks under SEBON's supervision, have no guidance on whether they may engage with digital asset businesses. About SEBON
Without a licensing framework, there is no mechanism to ensure that digital asset businesses in Nepal meet minimum standards for capitalization, governance, or risk management. About SEBON
SEBON's anti-money laundering functions are limited to traditional securities intermediaries, leaving cryptocurrency transactions outside any formal AML/CFT supervision. About SEBON
Securities Board of Nepal Jawalakhel, Lalitpur, Nepal 9 October 2020
Sanctions & Restrictions
Nepal Rastra Bank (NRB) Notice, August 2021: The NRB issued a notice stating that cryptocurrencies and schemes involving virtual currencies are illegal in Nepal. It warned the public against their use, citing the risk of fraud and financial instability.
Legal Reference: Nepal Rastra Bank, Foreign Exchange Management Department Notice dated Bhadra 6, 2078 (August 22, 2021), warning against virtual currencies and pyramid schemes. (Official link directly to this specific notice can be hard to maintain as NRB periodically updates its site; however, it's widely reported and confirmed by NRB officials).
General Context: The prohibition is rooted in the Foreign Exchange (Regulation) Act, 2019 (1962 A.D.) and the Nepal Rastra Bank Act, 2058 (2002 A.D.). These acts grant the NRB the authority to regulate foreign exchange and financial stability, under which cryptocurrencies are deemed unauthorized foreign exchange instruments.
Foreign Exchange (Regulation) Act, 2019 (1962 A.D.): https://nrb.org.np/contents/uploads/2020/09/Foreign-Exchange-Regulation-Act.pdf (See Section 3, regarding prohibition on foreign exchange transactions without permission).
Nepal Rastra Bank Act, 2058 (2002 A.D.): https://nrb.org.np/contents/uploads/2020/09/Nepal-Rastra-Bank-Act.pdf (See Sections 5-7 on the functions, duties, and powers of the Bank).
Compliance Requirement: If cryptocurrency were legal or if Nepalese individuals were found to be holding crypto assets subject to a UN sanction, Nepal would be required to freeze those assets. This applies to any assets, including virtual assets.
Sanctioned Entity Screening: Nepal's financial institutions (in traditional finance) and relevant authorities are responsible for screening against the UN sanctions lists (e.g., ISIL (Da'esh) & Al-Qaida Sanctions List, DPRK Sanctions List, etc.). If crypto was legalized, VASPs would likewise be required to screen customers and transactions against these lists.
Legal Reference: United Nations Security Council Resolutions and the lists they generate.
Nepal's Money Laundering Prevention Act, 2064 (2008 A.D.) and its regulations provide the framework for implementing financial sanctions and combating financing of terrorism.
Legal Reference: https://www.fiu.gov.np/wp-content/uploads/2023/12/Money-Laundering-Prevention-Act-2008-English-Version-Updated-in-2023.pdf (See Section 11 on freezing assets, and general provisions related to CFT).
Are denominated in U.S. dollars and clear through the U.S. financial system.
Touch U.S. infrastructure or technology.
Compliance Requirement: While not directly binding on a purely Nepalese entity without a U.S. nexus, any international VASP dealing with Nepalese customers would be required to comply with OFAC sanctions. Therefore, a Nepalese individual engaging with a foreign VASP that processes USD or has a U.S. presence would indirectly be subject to OFAC screening.
Sanctioned Entity Screening: Foreign VASPs would screen Nepalese users against OFAC's Specially Designated Nationals (SDN) and Blocked Persons List and other relevant sanctions lists.
OFAC's Guidance on Virtual Currency: https://home.treasury.gov/system/files/126/virtual_currency_guidance_final.pdf
Entities incorporated or constituted under the law of an EU Member State.
Any person or entity carrying out activities within the territory of an EU Member State.
EU nationals, regardless of where they are.
Compliance Requirement: Similar to OFAC, if a Nepalese individual were to interact with an EU-based VASP, that VASP would be obligated to comply with EU sanctions.
Sanctioned Entity Screening: EU VASPs would screen Nepalese customers against the EU's Consolidated Financial Sanctions List.
European Commission - Financial Sanctions: https://finance.ec.europa.eu/financial-sanctions-policy_en
For Nepal's Authorities (General): Nepal's Financial Information Unit (FIU) and other financial regulatory bodies mandate screening for money laundering and terrorism financing purposes against UN sanctions lists for traditional financial transactions. If crypto were legalized, similar obligations would be extended to VASPs.
For Foreign VASPs: Any legitimate VASP operating globally, including those that might inadvertently or intentionally onboard Nepalese citizens (despite Nepal's ban), would have robust KYC/AML/CFT programs. These programs would include screening all customers and transactions against the UN, OFAC, and EU sanctions lists, as well as politically exposed persons (PEPs) lists and adverse media.
Within Nepal: The primary geographic restriction is that all cryptocurrency-related activities are banned nationwide.
International: Beyond Nepal's domestic ban, standard international geographic restrictions apply. This means that engaging in crypto transactions with individuals or entities located in, or associated with, countries under international sanctions (e.g., North Korea, Iran, Russia, specific regions) would be prohibited by the relevant sanctioning bodies (UN, OFAC, EU) if a nexus exists.
Imprisonment: Individuals can face jail terms.
Asset Forfeiture: Confiscation of assets involved in the illegal activity.
Legal Reference: The Foreign Exchange (Regulation) Act, 2019 (1962 A.D.) outlines penalties for unauthorized foreign exchange transactions. Section 12, for example, empowers the NRB to fine individuals/entities up to 300% of the disputed amount or imprison them for up to three years, or both. The Money Laundering Prevention Act, 2064 (2008 A.D.) also provides for penalties for predicate offenses related to illegal financial activities.
OFAC: Severe civil and criminal penalties, including massive fines (millions of dollars), imprisonment for individuals, and being cut off from the U.S. financial system.
EU: Fines and potential imprisonment, varying by Member State law, but generally aligned with the severity of the violation.
UN: While the UN itself doesn't directly impose penalties on individuals, member states (like Nepal) are obligated to enforce the sanctions, which would entail domestic legal action and penalties as per Nepalese law.
Nepal does not have its own specific "crypto sanctions list." This is primarily because all crypto activities are banned, so there's no framework for regulating or sanctioning specific crypto entities domestically.
However, Nepal is obligated to implement the UN Security Council Consolidated List and its related lists (e.g., ISIL (Da'esh) & Al-Qaida Sanctions List, Taliban Sanctions List, DPRK Sanctions List, etc.). These lists contain individuals and entities that may be involved in financing terrorism or proliferation through any means, including cryptocurrencies. Nepal's financial intelligence unit (FIU) and law enforcement would be responsible for identifying and freezing assets, including crypto, if discovered, belonging to such designated individuals or entities.
Enforcement Actions
Regulator Name: Nepal Rastra Bank (NRB)
Entity Targeted: General Public, financial institutions, and any individuals or groups involved in cryptocurrency-related activities. Violation Type: Engaging in, facilitating, or promoting illegal cryptocurrency activities (trading, mining, holding, investment), which are considered violations of foreign exchange regulations and potentially money laundering laws. Penalty Amount: The NRB itself doesn't issue direct "penalties" in these warnings, but the legal framework invoked carries significant penalties. Under the Foreign Exchange (Regulation) Act, 2019 (2076 BS), violations can lead to:.
Confiscation of the disputed amount.
A fine of up to three times the disputed amount.
Imprisonment for up to three years.
Confiscation of assets used in the illegal activity.
Additionally, money laundering charges under the Asset (Money) Laundering Prevention Act, 2008 (2064 BS) can lead to heavier fines and longer prison sentences.
Date: Ongoing, with significant public warnings reiterated in October 2021, January 2022, and subsequent informal statements by officials.
Outcome: Crypto activities remain illegal in Nepal. These warnings serve as a deterrent and provide the legal grounds for law enforcement agencies (like Nepal Police) to initiate criminal investigations and arrests.
The Kathmandu Post (Oct 2021): Nepal Rastra Bank warns against trading cryptocurrencies
The Himalayan Times (Jan 2022): NRB reiterates ban on cryptocurrency and pyramid schemes
OnlineKhabar (Nepali - Feb 2022): क्रिप्टो कारोबार गरे नगर्न चेतावनी, गरे कारबाही गरिने राष्ट्र बैंकको भनाइ (NRB warns against crypto trading, says action will be taken if done)
Regulator Name: Nepal Police (specifically, the Central Investigation Bureau - CIB)
Entity Targeted: Multiple individuals involved in the illegal trading and mining of cryptocurrencies. Violation Type: Illegal foreign exchange transactions, operating prohibited financial activities, potential money laundering. These charges are brought under the Foreign Exchange (Regulation) Act, 2019 (2076 BS), and potentially the Asset (Money) Laundering Prevention Act, 2008 (2064 BS) and Cyber Crime Act, 2063 BS. Penalty Amount: Varies by case, but as per the invoked laws, can include:.
Confiscation of assets (including digital assets if traceable)
Fines up to three times the amount involved in the illegal transaction.
Date: A major crackdown occurred in January 2022, leading to multiple arrests. Sporadic arrests and investigations have continued since.
Outcome: Several individuals were arrested, investigated, and faced legal proceedings. These actions send a strong message that authorities are actively monitoring and prosecuting those involved in crypto activities. The outcome for individual cases can include pre-trial detention, asset seizure, and eventual conviction with fines and imprisonment.
The Kathmandu Post (Jan 2022): CIB arrests six people for trading cryptocurrency
Republica (Jan 2022): CIB arrests six people for illegal cryptocurrency transactions
OnlineKhabar (Nepali - Jan 2022): क्रिप्टोकरेन्सी कारोबार गरेको आरोपमा ६ जना पक्राउ (6 arrested on charges of cryptocurrency trading)
Research & Articles
Regulatory Forecast
high confidenceLikely enforcement action expected around 2027-03-16
Based on 76 historical regulatory events for Nepal, averaging every 162 days, with increasing regulatory activity.
Recent Updates
Money Laundering Prevention Act, 2008 (MLPA): This is the foundational law for AML in Nepal. It defines money lau...
Money Laundering Prevention Act, 2008 (MLPA): This is the foundational law for AML in Nepal. It defines money laundering, establishes reporting obligations, and sets penalties.
Relevant Directives from Nepal Rastra Bank (NRB): The NRB issues specific directives and guidelines for financial...
Relevant Directives from Nepal Rastra Bank (NRB): The NRB issues specific directives and guidelines for financial institutions, and it would likely extend or create new ones for VASPs.
Nepal Rastra Bank (NRB): As the central bank and primary financial sector regulator, the NRB would be responsible...
Nepal Rastra Bank (NRB): As the central bank and primary financial sector regulator, the NRB would be responsible for licensing, regulating, and supervising VASPs, issuing directives, and conducting compliance oversight.
Nepal Rastra Bank (NRB) Notices/Circulars:
Nepal Rastra Bank (NRB) Notices/Circulars:
Outcome: Crypto activities remain illegal in Nepal. These warnings serve as a deterrent and provide the legal gro...
Outcome: Crypto activities remain illegal in Nepal. These warnings serve as a deterrent and provide the legal grounds for law enforcement agencies (like Nepal Police) to initiate criminal investigations and arrests.
Nepal Rastra Bank (NRB) Notice, August 2021: The NRB issued a notice stating that cryptocurrencies and schemes in...
Nepal Rastra Bank (NRB) Notice, August 2021: The NRB issued a notice stating that cryptocurrencies and schemes involving virtual currencies are illegal in Nepal. It warned the public against their use, citing the risk of fraud and financial instability.
Sanctioned Entity Screening: Nepal's financial institutions (in traditional finance) and relevant authorities are...
Sanctioned Entity Screening: Nepal's financial institutions (in traditional finance) and relevant authorities are responsible for screening against the UN sanctions lists (e.g., ISIL (Da'esh) & Al-Qaida Sanctions List, DPRK Sanctions List, etc.). If crypto was legalized, VASPs would likewise be required to screen customers and transactions against these lists.
Compliance Requirement: While not directly binding on a purely Nepalese entity without a U.S. nexus, any internat...
Compliance Requirement: While not directly binding on a purely Nepalese entity without a U.S. nexus, any international VASP dealing with Nepalese customers would be required to comply with OFAC sanctions. Therefore, a Nepalese individual engaging with a foreign VASP that processes USD or has a U.S. presence would indirectly be subject to OFAC screening.
Sanctioned Entity Screening: Foreign VASPs would screen Nepalese users against OFAC's Specially Designated Nation...
Sanctioned Entity Screening: Foreign VASPs would screen Nepalese users against OFAC's Specially Designated Nationals (SDN) and Blocked Persons List and other relevant sanctions lists.
Compliance Requirement: Similar to OFAC, if a Nepalese individual were to interact with an EU-based VASP, that VA...
Compliance Requirement: Similar to OFAC, if a Nepalese individual were to interact with an EU-based VASP, that VASP would be obligated to comply with EU sanctions.
Sanctioned Entity Screening: EU VASPs would screen Nepalese customers against the EU's Consolidated Financial San...
Sanctioned Entity Screening: EU VASPs would screen Nepalese customers against the EU's Consolidated Financial Sanctions List.
For Foreign VASPs: Any legitimate VASP operating globally, including those that might inadvertently or intentiona...
For Foreign VASPs: Any legitimate VASP operating globally, including those that might inadvertently or intentionally onboard Nepalese citizens (despite Nepal's ban), would have robust KYC/AML/CFT programs. These programs would include screening all customers and transactions against the UN, OFAC, and EU sanctions lists, as well as politically exposed persons (PEPs) lists and adverse media.
Within Nepal: The primary geographic restriction is that all cryptocurrency-related activities are banned nationw...
Within Nepal: The primary geographic restriction is that all cryptocurrency-related activities are banned nationwide.
International: Beyond Nepal's domestic ban, standard international geographic restrictions apply. This means that...
International: Beyond Nepal's domestic ban, standard international geographic restrictions apply. This means that engaging in crypto transactions with individuals or entities located in, or associated with, countries under international sanctions (e.g., North Korea, Iran, Russia, specific regions) would be prohibited by the relevant sanctioning bodies (UN, OFAC, EU) if a nexus exists.
OFAC: Severe civil and criminal penalties, including massive fines (millions of dollars), imprisonment for indivi...
OFAC: Severe civil and criminal penalties, including massive fines (millions of dollars), imprisonment for individuals, and being cut off from the U.S. financial system.
EU: Fines and potential imprisonment, varying by Member State law, but generally aligned with the severity of the...
EU: Fines and potential imprisonment, varying by Member State law, but generally aligned with the severity of the violation.
UN: While the UN itself doesn't directly impose penalties on individuals, member states (like Nepal) are obligate...
UN: While the UN itself doesn't directly impose penalties on individuals, member states (like Nepal) are obligated to enforce the sanctions, which would entail domestic legal action and penalties as per Nepalese law.
Nepal does not have its own specific "crypto sanctions list." This is primarily because all crypto activities are...
Nepal does not have its own specific "crypto sanctions list." This is primarily because all crypto activities are banned, so there's no framework for regulating or sanctioning specific crypto entities domestically.
However, Nepal is obligated to implement the UN Security Council Consolidated List and its related lists (e.g., I...
However, Nepal is obligated to implement the UN Security Council Consolidated List and its related lists (e.g., ISIL (Da'esh) & Al-Qaida Sanctions List, Taliban Sanctions List, DPRK Sanctions List, etc.). These lists contain individuals and entities that may be involved in financing terrorism or proliferation through any means, including cryptocurrencies. Nepal's financial intelligence unit (FIU) and law enforcement would be responsible for identifying and freezing assets, including crypto, if discovered, belonging to such designated individuals or entities.
Regulatory Approach: Ban/Prohibition.
Regulatory Approach: Ban/Prohibition.
Basis of Prohibition: The Nepal Rastra Bank (NRB) has issued multiple directives and circulars prohibiting all ac...
Basis of Prohibition: The Nepal Rastra Bank (NRB) has issued multiple directives and circulars prohibiting all activities related to virtual currencies and digital assets. This is primarily driven by concerns related to foreign exchange control violations, money laundering, financial stability risks, and investor protection.
Nepal Rastra Bank (NRB): The central bank responsible for monetary policy and financial regulation, including the...
Nepal Rastra Bank (NRB): The central bank responsible for monetary policy and financial regulation, including the prohibition of cryptocurrency.
International Standing: Nepal is a member of the Financial Action Task Force (FATF), implying adherence to global AML...
International Standing: Nepal is a member of the Financial Action Task Force (FATF), implying adherence to global AML/CFT standards. However, no dedicated guidance on virtual assets has been issued by the FATF as of 2025, leaving local regulators without clear directives.
Arrests/Cases: No arrests or enforcement cases involving digital asset marketers have been publicly recorded by Nepal...
Arrests/Cases: No arrests or enforcement cases involving digital asset marketers have been publicly recorded by Nepali authorities.
- claim text Nepal Rastra Bank oversees financial regulation but lacks specific crypto guidance
- claim text Nepal Rastra Bank oversees financial regulation but lacks specific crypto guidance
Nepal Rastra Bank oversees financial regulation but lacks specific crypto guidance
Nepal Rastra Bank oversees financial regulation but lacks specific crypto guidance
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