Crypto ATM / kiosk operator in Afghanistan

The current de facto Taliban administration's official stance, as widely reported since August 2022, is a ban on cryptocurrency trading, deeming it "haram" (forbidden in Islam) and a source of fraud. This outright ban supersedes any potential regulatory framework for VASPs.

Any entity attempting to operate as a VASP would be doing so outside of the law as enforced by the current de facto authorities.

Violation Type: Engaging in unauthorized and prohibited financial activity (trading cryptocurrency). The Taliban's acting central bank chief has called crypto "haram" (forbidden in Islam) and a form of "gambling.". Penalty Amount: No specific fine amount is publicly reported for this blanket ban. Penalties involve arrests, detention, closure of businesses, and confiscation of assets.

Outcome: Significant suppression of the cryptocurrency market in Afghanistan, forcing traders underground or to flee the country. Numerous arrests have been reported.

Reuters: Afghanistan central bank bans online foreign currency trading, crypto (August 24, 2022) - https://www.reuters.com/markets/currencies/afghanistan-central-bank-bans-online-foreign-currency-trading-crypto-2022-08-24/

Al Jazeera: Taliban cracks down on crypto trading in Afghanistan (August 24, 2022) - https://www.aljazeera.com/news/2022/8/24/taliban-cracks-down-on-crypto-trading-in-afghanistan

CoinDesk: Afghanistan’s Taliban Shuts Down 16 Crypto Exchanges, Arrests Dealers (August 23, 2022) - https://www.coindesk.com/policy/2022/08/23/afghanistans-taliban-shuts-down-16-crypto-exchanges-arrests-dealers/

Regulator Name (de facto): Herat provincial police, under the authority of the Taliban regime.

Entity Targeted: At least 13 individuals involved in cryptocurrency exchanges and trading. Violation Type: Operating cryptocurrency exchanges and engaging in crypto trading, violating the nationwide ban imposed by the Taliban. Penalty Amount: Not specified as a monetary fine. The individuals were arrested, and the involved businesses were shut down. Further legal proceedings and outcomes (e.g., length of detention, confiscation of assets) are not publicly detailed by the regime.

Outcome: Arrests of key individuals, closure of an estimated 16 cryptocurrency exchanges in Herat alone, effectively dismantling the local crypto market.

TOLOnews: Crypto Currency Trading Banned in Afghanistan (August 24, 2022) - https://tolonews.com/business-179830 (This source reports the statement from Da Afghanistan Bank official confirming the ban and arrests in Herat.)

Transparency: Under the Taliban regime, there is a severe lack of transparency regarding legal processes, court decisions, specific charges, and exact penalties. Information is primarily derived from official statements or reports from international news agencies.

Continuing Risk: The ban remains in effect, and anyone found engaging in crypto trading faces the risk of arrest and other punitive measures by the Taliban authorities.

Da Afghanistan Bank (DAB): Currently controlled by the de facto Taliban administration. It is the institution that has reportedly enforced the ban on cryptocurrency trading. Therefore, its role concerning VASPs is one of prohibition and enforcement of the ban, rather than regulation and oversight.

FinTRACA: Its operational capacity and international recognition are highly questionable under the current regime.

These laws, while on the books from the previous government, do not specifically address virtual assets or VASPs. They were drafted before cryptocurrencies became a significant regulatory concern globally.

Under the previous AML/CFT framework, financial institutions (including any future regulated VASPs) were obliged to report suspicious transactions to the Financial Intelligence Unit of Afghanistan (FinTRACA).

Applying enhanced due diligence for high-risk customers or transactions (e.g., Politically Exposed Persons – PEPs, complex transactions, high-value transfers, or transactions with high-risk jurisdictions).

Verifying identity using reliable, independent source documents (e.g., national ID cards, passports). Note: In the U.S., REAL ID is officially unreliable for confirming citizenship per DHS, though passports remain a standard for identity verification in contexts like employment authorization.

Identifying the beneficial owner for legal persons and arrangements.

Conducting ongoing monitoring of the business relationship and transactions undertaken throughout the course of the relationship to ensure they are consistent with the obliged entity's knowledge of the customer, their business, and risk profile.

The AML law typically required obliged entities to retain records of customer identification data, account files, business correspondence, and transaction data for a minimum period (often 5-7 years) after the business relationship has ended or the transaction was completed.