Centralized exchange in Nepal
Order-book exchange that takes custody of user assets and matches trades between users.
CEX is not permitted in Nepal.
Verdict Details
- Permitted
- no
- Local entity required
- No
- Licensing burden
- None
- Last updated
- 2026-07-13
AML Obligations
- No AML/CTF obligations can be lawfully applied — all cryptocurrency activities (including exchange, custody, and trading) are prohibited. Any entity attempting to comply with AML rules would still be operating illegally.
- The Asset (Money) Laundering Prevention Act, 2008 (2064 BS) may be invoked as a charging basis against crypto operators, increasing penalties (heavier fines, longer prison sentences) but does not create a compliance framework.
Key Restrictions
- 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 and entities found engaging in these activities may be prosecuted under the Foreign Exchange (Regulation) Act, 2019 and other relevant statutes.
- No legal framework exists for virtual asset custody, segregation of client assets, cold storage requirements, or qualified custodian definitions.
Key Risks
- Criminal prosecution risk: Individuals found operating exchanges face fines up to three times the transaction amount, imprisonment for up to three years, and confiscation of assets.
- Active enforcement: Nepal Police CIB has conducted raids and arrests for crypto trading (e.g., January 2022 crackdown arresting six individuals).
- Money laundering charges can be layered on under the Asset (Money) Laundering Prevention Act, 2008, carrying even heavier penalties.
- The NRB has consistently reiterated its ban through public warnings (2017, 2021, 2022) — no legal ambiguity or safe harbor exists.
- No licensing pathway exists; any attempt to operate is per se illegal with no registration or compliance path to legitimacy.
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
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.
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.
Foreign Exchange (Regulation) Act, 2019 (B.S. 2076):
Regulatory Approach: Ban/Prohibition.
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.
None. There are no legally recognized or regulated Virtual Asset Service Providers (VASPs) in Nepal.
Confiscation of the disputed amount.
A fine of up to three times the disputed amount.
Imprisonment for up to three years.
Additionally, money laundering charges under the Asset (Money) Laundering Prevention Act, 2008 (2064 BS) can lead to heavier fines and longer prison sentences.
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.
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:.
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.
Verdict Attribution
- Source:
- AI-Generated · Unreviewed
- AI synthesized:
- 2026-07-13 (deepseek-chat)
- Last updated:
- 2026-07-13
- Confidence:
- high
This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.
Not permitted — Nepal imposes a comprehensive ban on all cryptocurrency activities (buying, selling, trading, mining, custody, and facilitation) under the Foreign Exchange (Regulation) Act, 2019, enforced by Nepal Rastra Bank and Nepal Police, with no licensing, registration, or compliance pathway available.
Questions this verdict aims to answer
- What exchange / VASP license applies?
- What custody segregation rules apply to user assets?
- What market-conduct and listing rules apply?
- What travel-rule obligations apply on withdrawals?