Taliban Arrests and Jails 8 People for Holding and Trading Crypto

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As an analyst with a background in economics and experience living in countries with restrictive financial regulations, I find the situation in Afghanistan regarding crypto quite intriguing. The Taliban’s decision to arrest and jail crypto traders for up to a month sends a chilling message to the community. This ban comes after the Taliban regime enforced a prohibition on cryptocurrency usage in the country following their takeover.

In Afghanistan, the Taliban authorities seized and imprisoned eight cryptocurrency traders in Herat, which is the third biggest city in the country.

Taliban Sends Afghani Crypto Traders to Jail for One Month

Based on one source’s claim to Crypto.news, eight individuals were taken into custody in May and held at Herat’s main prison for 28 days. Two of these individuals asserted that their cryptocurrency assets were not seized by the Taliban. However, there are allegations that the Taliban have arrested a band of crypto traders and confiscated all their digital currencies. Additionally, there are signs that the authorities may imprison certain crypto traders for up to six months.

In the year 2022, the Taliban administration prohibited the usage of cryptocurrencies in Afghanistan, implementing this ban via the nation’s central bank. The population reacted with opposition following the announcement, expressing concern that crypto was their sole means of transferring funds to and from the country. This backlash arose due to various sanctions imposed on the government in reaction to the Taliban regime. As investors persisted in defiance, the administration responded by detaining traders and shutting down numerous firms. By August, at least 20 crypto businesses had been forced to cease operations in Herat.

Numerous critics have voiced their disapproval of the ban, expressing concerns over its economic repercussions. For example, a trader who previously made a profit of 1% to 2% by selling USDT shared that he can no longer provide for his family’s basic needs. Despite acknowledging the risks involved in continuing his trade, he feels compelled to do so due to a lack of alternative options. Another individual revealed that his family relies on Bitcoin (BTC) and USDT transfers from a relative residing in the United States.

Crypto Ban in Afghanistan

Prior to the ban, the crypto market in Afghanistan experienced significant changes with the Taliban’s takeover. As per a report from Chainalysis released in 2022, Afghani citizens received approximately $68 million in crypto value monthly through remittances. In September 2021, this amount reached an astounding $150 million. Nevertheless, after the Taliban seized power, the value plummeted to nearly $80,000.

In Afghanistan, where digital assets are prohibited, the Taliban government may not have a problem with blockchain technology as a whole. Last December saw an investment by Algorand Foundation in HesabPay, an interoperable digital payments platform based in Afghanistan, via Algorand Ventures. Originally established to streamline humanitarian aid distribution, HesabPay now offers various transactions, such as paying utility bills, purchasing phone credit, and transferring funds among individuals.

As a crypto investor, I’m excited to hear about HesabPay’s decision to leverage Algorand’s blockchain technology for their payment solutions. In a recent press release, the Algorand Foundation announced this collaboration, explaining that it will enable HesabPay to process transactions faster and more reliably than ever before. This is particularly significant for Afghanistan, where, as per the World Bank, approximately 85% of the adult population remains unbanked. Therefore, this partnership could bring about a transformative change in the financial landscape of the country.

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2024-07-03 16:12