Ethiopian authorities say they have arrested 112 people and suspended 519 bank accounts as part of a nationwide crackdown on what they describe as illegal foreign currency trading and unlicensed money transfer networks, according to reporting from BBC Amharic and Borkena.

The operation was carried out by the National Intelligence and Security Service (NISS), the Financial Security Service, the Federal Police, and unnamed regional security agencies, government statements said. Officials have not disclosed which banks hold the frozen accounts or the amounts involved.

Seven of the detained individuals are reported to be foreign nationals, including Chinese citizens. Authorities allege the group was involved in informal cross-border currency transfers, unlicensed remittance services, and money laundering activities.

Officials say the networks allowed payments to be made in Ethiopia in birr while foreign currency was held or circulated abroad, bypassing the formal banking and remittance system. The government argues that such transactions have contributed to foreign exchange shortages and undermined ongoing macroeconomic reforms.

NISS also claimed that some of the individuals were linked to funding armed groups and “sabotaging” import-export trade, though no evidence was publicly presented, and the agencies did not specify how trade was disrupted. There is no indication that the suspects have yet been granted access to legal counsel or had the opportunity to respond to the allegations.

The action follows recent statements by the National Bank of Ethiopia, which in October said it was preparing to take legal measures against unlicensed money transfer operators and informal forex brokers. The central bank said last week it had begun working with “relevant security structures” to enforce these measures, but has not provided further operational details.

Ethiopia has been facing acute foreign currency shortages, with IMF estimates suggesting net reserves equivalent to less than a month of imports, and a parallel market rate that can trade at nearly double the official level. Diaspora remittances have increasingly bypassed commercial banks in favour of informal channels, which offer faster settlement and better rates.

The government argues that curbing these networks is necessary to stabilise the birr, though critics say restrictive FX rules have contributed to the growth of the informal market.

The government has tightened enforcement around foreign exchange transactions amid chronic FX shortages, high inflation, and efforts to stabilise the currency. Informal hawala-style remittance networks have expanded in recent years as diaspora inflows increasingly move outside the banking system due to wide spreads between official and parallel market rates.