The Central Bank of Nepal, through its Financial Information Unit, has published a “Strategic Analysis Report, 2025 on Virtual Assets” analysing money laundering, terrorist financing and proliferation financing (ML/TF/PF) risks associated with virtual asset activity in Nepal, and reaffirming that any transaction, use, transfer or investment involving virtual assets is prohibited under prevailing law. The analysis draws on suspicious transaction and activity reports (STRs/SARs) submitted via the FIU’s goAML system from January 2021 to July 2025, alongside national and international sources and international strategic analysis. It does not assess any specific case, entity or person, focusing instead on methods, trends, typologies and risk indicators of misuse. Despite the legal ban, the FIU links virtual asset-related activity to criminal conduct including illegal foreign exchange (hundi) transactions, online financial fraud, online gambling, concealment of the true nature of business transactions and the use of money mules, with potential to facilitate cross-border value transfer, layering and concealment of illicit income outside the formal financial system. Key investigation and control challenges highlighted include technical complexity, cross-border jurisdiction issues, and practical difficulties in seizing and managing virtual assets. Targeted recommendations span improving the quality of STRs/SARs, strengthening risk-based supervision, enhancing inter-agency coordination, building technical capacity and expanding public awareness; the report also states that investigations, freezing or seizure and prosecutions may be pursued against persons or institutions directly or indirectly involved in prohibited virtual asset activity in line with relevant law.

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