KATHMANDU, July 4 — Police here have arrested a 25-year-old man accused of running illegal cryptocurrency transactions worth more than Rs 14.87 million, converting money obtained through online fraud into digital assets. The Kathmandu District Police Office identified the suspect on Friday as Mukesh Prajapati of Madhyapur Thimi-5, Bhaktapur. According to authorities, he used social media to lure people with various inducements, defrauded them, and then exchanged the proceeds into cryptocurrency.
Police spokesperson Superintendent of Police Pawan Kumar Bhattarai said the investigation has so far found that Prajapati conducted cryptocurrency transactions totaling Rs 148,76,527.46. That is a significant sum for families across the region, many of whom are still learning to navigate the risks of online platforms.
Investigators also recovered digital assets worth 7,485 US dollars — approximately Rs 1.14 million — from his various digital accounts. For communities in the Kathmandu Valley, this case is a stark reminder of how quickly social media can be weaponised to target ordinary people. The Kathmandu District Court has granted police a five-day remand to continue the investigation.
Cryptocurrency trading is illegal in Nepal, and this arrest underscores the legal risks for those who operate outside the country’s financial regulations. What this means for people is clear: authorities are watching digital transactions closely, and the consequences for running such schemes can be severe.
Closer to home, residents of Bhaktapur and surrounding areas will be watching to see if more victims come forward as the investigation unfolds over the coming days. Nepal’s central bank, Nepal Rastra Bank, has repeatedly warned against cryptocurrency transactions, classifying them as illegal under the country’s foreign exchange and financial regulations. The government has not licensed any platform for trading digital currencies, and authorities have previously shut down unregistered exchanges operating from within the country.
This case adds to a growing list of enforcement actions as Nepali law enforcement agencies increase their focus on cybercrime and digital financial fraud. The use of social media to solicit victims is a common tactic in online fraud schemes across South Asia, where platforms like Facebook, TikTok, and messaging apps are widely used for both legitimate business and illicit activities. Police in Nepal have in recent years formed specialized cybercrime units to track such operations, often collaborating with international agencies when transactions cross borders.
The scale of the sums involved in this case highlights the potential reach of individual operators who exploit gaps in digital literacy and regulatory oversight. For the broader region, the case underscores the tension between the global rise of cryptocurrency adoption and Nepal’s strict prohibition.
While some neighboring countries have moved to regulate digital assets, Nepal maintains a blanket ban, leaving those who engage in crypto trading vulnerable to both legal penalties and fraud. The recovery of funds from digital accounts also reflects the increasing ability of Nepali investigators to trace and seize assets held in online wallets, a capability that has expanded with training and technological support from international partners.
