When it comes to cryptocurrency, Bangladesh stands out as one of the strictest countries in Asia. It doesn’t have a law that says "crypto is illegal"-but that doesn’t mean you can use it. The government doesn’t need to. It uses older laws to crush crypto activity before it even starts. If you’re holding Bitcoin, trading Ethereum, or mining Litecoin in Bangladesh, you’re already walking a legal tightrope-and the drop below is real.
How Bangladesh Banned Crypto Without Writing a Law
The Bangladesh Bank, the country’s central bank, first warned citizens about Bitcoin in 2014. Since then, it has issued at least five major statements, each growing harsher. By 2017, the bank declared cryptocurrency use illegal, citing risks of money laundering and terrorist financing. But here’s the twist: there’s no specific crypto law. Instead, authorities rely on three older laws to enforce the ban.
The Foreign Exchange Regulations Act of 1947 is the main tool. It bans unauthorized foreign currency transactions. Since crypto isn’t legal tender, any trade using Bitcoin or Ethereum is treated like smuggling dollars. Then there’s the Anti-Money Laundering Act of 2012, which gives authorities power to freeze accounts and arrest people for suspicious financial flows. Finally, the Information and Communication Technology (ICT) Act lets them charge people for "hurting national security" if they use crypto to bypass financial controls.
These laws weren’t made for crypto. But they’re being used for it anyway. That’s why enforcement is messy. There’s no clear line between owning crypto and using it illegally. The Bangladesh Bank says owning crypto isn’t a crime-but if you trade it, send it abroad, or mine it, you’re breaking the law.
Crypto Mining Is a Crime-And People Are Going to Jail
One of the clearest enforcement targets is crypto mining. In 2024, Dhaka police arrested six men running underground mining farms. They were using stolen electricity, running hundreds of rigs, and converting Bitcoin into Taka through informal exchanges. Authorities didn’t charge them with "crypto mining." They charged them under the Anti-Money Laundering Act for laundering foreign currency and violating the ICT Act.
Each arrest came with a warning: if you’re mining crypto in Bangladesh, you’re not just breaking rules-you’re committing a financial crime. The government has made it clear that mining is treated like a form of illegal foreign currency trafficking. Even if you’re not selling the coins, just running the hardware is enough to trigger an investigation.
This is different from places like Canada or Sweden, where mining is legal and even encouraged. Bangladesh doesn’t care about energy efficiency or blockchain innovation. It only cares about control. The electricity used for mining is state-owned. The money earned from crypto is outside the banking system. Both are unacceptable.
Why the Government Keeps Pushing This Ban
The Bangladesh Bank’s reasoning is simple: crypto threatens the financial system. They point to past scams like MTFE, a fake crypto investment scheme that tricked over 10,000 people into depositing tens of millions of dollars before vanishing in 2021. The bank says crypto enables anonymity, making it easy for criminals to hide money.
They’re not wrong. TRC20 wallets, which allow fast, low-cost transfers, are popular in Bangladesh. But they’re also hard to trace. Unlike banks, crypto wallets don’t require ID. That’s why the Financial Intelligence Unit (FIU) struggles to monitor transactions. The FIU has no access to blockchain data. It can’t track who sent what to whom. So instead of building surveillance tools, they’ve chosen to shut it all down.
There’s also a cultural layer. Bangladesh’s financial system is built on trust in state institutions. Mobile money services like bKash and Nagad are wildly successful because they’re tied to government-backed banks. Crypto, with its decentralized, peer-to-peer nature, feels like a threat to that system. The government doesn’t want people bypassing banks. It wants them inside them.
The Blockchain Paradox: Tech Is Welcome, Crypto Isn’t
Here’s the biggest contradiction in Bangladesh’s policy. In 2020, the government released the National Blockchain Strategy. It called blockchain essential for modernizing land records, digital IDs, and public services. Government departments are now testing blockchain for voting systems, tax records, and supply chain tracking.
So why is blockchain okay for the government-but not for citizens? The answer is control. The government wants to use blockchain to track its own data. It doesn’t want citizens using blockchain to track theirs. This isn’t about technology. It’s about who holds power.
As a result, you’ll find blockchain projects in Dhaka’s public offices, but you’ll also find police raids on home mining rigs. The same tech is fine when it serves the state. Not so much when it serves the people.
What Happens If You Get Caught?
There’s no official penalty list. But based on court cases from 2022 to 2024, here’s what typically happens:
- If you’re caught trading crypto: your bank account is frozen, your phone and computers seized, and you’re questioned by the Criminal Investigation Department (CID).
- If you’re mining: you’re charged under the ICT Act for "hurting national financial security." Jail time is possible-up to 7 years in extreme cases.
- If you send crypto abroad: you’re treated as violating the Foreign Exchange Regulations Act. That can mean fines, asset seizure, or even travel bans.
Tax? There’s no crypto tax law. But the National Board of Revenue says any profit from crypto must be reported under the Income Tax Ordinance of 1984. If you don’t report it, you’re guilty of tax evasion. If you do report it, you’re admitting you broke the law.
There’s no gray area. You’re either compliant with the banking system-or you’re a criminal.
The Underground Market Keeps Growing
Despite the crackdown, crypto use hasn’t disappeared. It’s gone underground. People now trade through peer-to-peer apps like LocalBitcoins, Paxful, and Telegram groups. They use cash deposits, mobile money transfers, and even gift cards to swap crypto. Some traders have developed secret codes to avoid detection-"P2P" becomes "P2," "BTC" becomes "B," and "TRC20" becomes "T20."
Estimates suggest over 1.2 million Bangladeshis still hold crypto. Most are young, tech-savvy, and frustrated with low bank interest rates and slow remittance systems. They know the risk. But they also know that sending money home from the Middle East or Malaysia can take weeks and cost 15% in fees. Crypto cuts that to hours and 1%.
That’s why enforcement is failing. You can arrest a few miners. But you can’t arrest a million people trading on WhatsApp.
Why Bangladesh Is Falling Behind Its Neighbors
While Bangladesh clings to its ban, its neighbors are moving forward. In May 2025, Pakistan launched the Pakistan Digital Assets Authority (PDAA). It now licenses exchanges, regulates wallets, and even allocated 2,000 megawatts of power for Bitcoin mining. It’s building a national crypto reserve.
That’s not just policy. That’s strategy. Pakistan sees crypto as a way to attract investment, reduce remittance costs, and create jobs. Bangladesh sees it as a threat to control.
And it’s costing Bangladesh. Remittance flows from Gulf countries are dropping. Workers are turning to crypto to send money home faster. Bangladesh’s banks are losing fees. Meanwhile, Pakistan’s crypto market hit $25 billion in 2023. Bangladesh’s? Still invisible.
Will Bangladesh Change Its Mind?
The Financial Action Task Force (FATF) has flagged Bangladesh for non-compliance. Recommendation 15 says countries must regulate virtual assets. Bangladesh hasn’t. That puts it at risk of being blacklisted-meaning international banks could cut ties with Bangladeshi institutions.
That’s the real pressure point. Not public opinion. Not tech progress. Not even protests. It’s money. If global banks start refusing to process transactions with Bangladesh, the government will have no choice but to act.
Right now, the Ministry of Finance is quietly reviewing options. Some officials want to license crypto exchanges. Others want to ban everything harder. But until the bank and the ministry agree, nothing changes.
For now, the message is clear: if you’re in Bangladesh, don’t touch crypto. The laws aren’t made for it. The penalties aren’t written down. But they’re real-and they’re getting worse.
Is it illegal to own Bitcoin in Bangladesh?
Owning Bitcoin or any cryptocurrency isn’t explicitly illegal under Bangladeshi law. But the Bangladesh Bank says crypto has no legal status, and using it-buying, selling, trading, or mining-is considered a violation of the Foreign Exchange Regulations Act and Anti-Money Laundering Act. So while possession alone may not lead to arrest, any activity around it does.
Can I get arrested for mining crypto in Bangladesh?
Yes. In 2024, multiple individuals were arrested in Dhaka for running crypto mining operations. Authorities charged them under the ICT Act and Anti-Money Laundering Act, not because mining is banned by name, but because it’s seen as unauthorized foreign currency activity and a threat to financial stability. Jail terms of up to 7 years are possible.
Does Bangladesh have a crypto tax?
There’s no specific crypto tax law. But the National Board of Revenue says all crypto profits fall under the Income Tax Ordinance of 1984. If you make money from trading or mining, you’re supposed to report it. But reporting means admitting you broke the law. Not reporting risks tax evasion charges. Either way, you’re in legal danger.
Why does Bangladesh allow blockchain but ban crypto?
The government supports blockchain for public services like land records and digital IDs because it gives them more control and transparency over their own systems. But it bans crypto for private use because it removes control from state institutions. It’s not about the technology-it’s about who controls the money.
What happens if I send crypto to someone outside Bangladesh?
Sending crypto abroad is treated as a violation of the Foreign Exchange Regulations Act of 1947. Authorities view it as moving money outside the official banking system without approval. This can lead to asset freezes, travel bans, or criminal charges. Even small transfers have triggered investigations.
Is there a difference between crypto and blockchain in Bangladesh’s laws?
Yes. The government distinguishes between blockchain technology (which it supports for public use) and cryptocurrency (which it bans for private use). Blockchain is seen as a tool for efficiency and control. Crypto is seen as a threat to financial order. The law treats them as completely separate, even though they’re built on the same foundation.
How does Bangladesh’s crypto ban compare to Pakistan’s?
Bangladesh bans all crypto activity and enforces it through old financial laws. Pakistan, as of 2025, created a legal framework with the Pakistan Digital Assets Authority (PDAA), licenses exchanges, and even allocated power for mining. Pakistan sees crypto as an economic opportunity. Bangladesh sees it as a threat. The contrast couldn’t be starker.
Can I use crypto for remittances in Bangladesh?
Using crypto for remittances is illegal under Bangladeshi law. The Bangladesh Bank explicitly prohibits using virtual assets to transfer money across borders. While many people still do it to avoid high fees and delays, doing so puts you at risk of arrest, account freezes, and criminal charges under the Foreign Exchange Regulations Act.
