The Taliban-led government in Afghanistan has arrested eight cryptocurrency traders in Herat, a major city in the northwest of the country. This move comes amidst a broader crackdown on digital currencies, which the government declared illegal in August 2022.

Traders Imprisoned

One of the arrested traders, who requested anonymity, revealed that he and seven others were detained in May and spent 28 days in Herat’s central prison. Despite their release, the threat of further punishment looms large, with some sources suggesting potential six-month jail sentences for those involved in crypto trading.

The ban on cryptocurrencies has hit traders hard. One dealer, who previously earned a small commission by selling USDT (a type of cryptocurrency), shared his struggle to make ends meet. “Now I don’t know what to do. The prices of goods are very high, and the economy is on the brink of a collapse while there’s nothing else to do,” he said.

Crypto as a Lifeline

For some Afghan citizens, cryptocurrencies were a vital lifeline. Before the ban, one individual received financial support from his brother in the U.S. through Bitcoin and USDT. Now, without access to these digital currencies, it can take weeks to receive and withdraw money. He lamented, “It’s all because this country, with thousands of years of history, doesn’t have access to standard banks and bans its only way out.”

While the Taliban did not seize the assets of the two traders who spoke out, others were less fortunate. Sources indicate that several crypto dealers had their digital holdings confiscated by the government during recent arrests.

A Dire Economic Situation

The economic situation in Afghanistan is dire. With traditional banking systems inadequate and the ban on cryptocurrencies cutting off a crucial financial lifeline, many Afghans are left struggling to survive. The traders’ plight underscores the broader economic challenges facing the country under Taliban rule.