Very few countries around the world effectively prohibit people from using Bitcoin. That doesn’t mean police can’t and don’t arrest individuals for their involvement in Bitcoin, though. In Nepal, at least seven people were arrested for being involved in cryptocurrency trading operations. It seems these trades were executed “without authorization”. That’s a strange explanation, considering Nepal doesn’t have any active cryptocurrency regulation whatsoever.

Nepal Arrests Raise a lot of Questions

Being arrested while doing something that is not considered to be illegal will always raise more questions than answers. This is especially true when the activity being performed involves Bitcoin or any other cryptocurrency. As of right now, Nepal does not have any official regulation prohibiting the use or trading of cryptocurrencies. However, local law enforcement certainly feels otherwise, as they arrested seven individuals for their cryptocurrency trading activities this week.

This certainly begs the question as to why these people were arrested in the first place. According to a local source which contacted us by email, the arrests were made due to trading bitcoins “without authorization”. That is a rather interesting point of view put forth by the Central Investigation Bureau, as consumers in Nepal can’t ask anyone for permission when it comes to dealing with cryptocurrencies whatsoever. Nor should anyone need to do so in the first place.

While it is true a communist government won’t take kindly toward cryptocurrencies, arresting people without a valid reason won’t go over too well either. Regulatory guidelines are currently being worked out by the Nepalese government, but until those are in place, people are still free to do as they like. Or that is how it should be, at least, even though a communist government may have a very different opinion on these matters.

Local press reports indicate that the suspects were arrested in Kathmandu and Chitwan. They are all still in police custody as we speak, but no further information has been revealed as of yet. All of this raises even more questions as to why these people were arrested in the first place. No currency amounts have been specified either, which only adds more fuel to this mystery investigation. It is evident that all suspects face jail time, although the grounds on which such a verdict would be determined remain unclear.

More broadly, it seems things are going from bad to worse in Nepal for Bitcoin users and companies as we speak. The impending regulation will assuredly introduce some changes over the next few months. It is certainly possible the government will crack down on cryptocurrencies as a whole and prohibit this new form of money from being traded altogether. Bitsewa, one of the few exchanges based in the country, has already shut down this week. The Nepalese version of LocalBitcoins isn’t all that popular either, which is somewhat surprising.

It will be interesting to see how the cryptocurrency sector develops in Nepal. Although this is not a major cryptocurrency hub by any stretch of the imagination, any form of regulation could set a dangerous precedent and stifle innovation. Whether or not Bitcoin will be banned altogether remains anybody’s guess for the time being. There are a lot of questions and very few answers right now; that much is certain.