Crypto Ban in Bangladesh: Legal Consequences for Bitcoin Trading

• by Eamon Ledgerwood
• Oct 28, 2025
• 10 Comments

Crypto Ban in Bangladesh: Legal Consequences for Bitcoin Trading

What Happens If You Trade Bitcoin in Bangladesh?

In Bangladesh, trading Bitcoin isn’t just risky-it’s legally dangerous. The central bank, Bangladesh Bank, has banned all cryptocurrency transactions since 2017. But here’s the catch: owning Bitcoin isn’t explicitly illegal. The law doesn’t say, "Don’t hold Bitcoin." It says, "Don’t use it to move money." And that gray area is where people get trapped.

If you buy Bitcoin on Binance or trade it through a local agent, you’re not breaking a single law that says "Bitcoin is banned." But if your bank notices unusual transfers, if the Financial Intelligence Unit (BFIU) flags your mobile wallet activity, or if you’re caught exchanging Tether for cash, you’re suddenly under investigation. And once you’re under investigation, you’re facing serious consequences.

The Laws That Actually Get You Arrested

The real danger isn’t the crypto ban itself-it’s how authorities use other laws to punish it. The Money Laundering Prevention Act of 2012 is the main weapon. Section 6 says it’s a crime to handle money from illegal activities. The government argues that since crypto isn’t legal tender, any transaction involving it is automatically suspicious. That’s enough to trigger a criminal case.

Penalties? Up to 10 years in prison and fines between 10,000 and 1,000,000 Bangladeshi Taka (roughly $90 to $9,000 USD). That’s not a warning. That’s a prison sentence.

Real cases prove this isn’t theoretical. In July 2022, 14 people in Dhaka were arrested for running a crypto exchange that handled $2.3 million. In February 2023, a trader named Mohammad Ali had 127 Bitcoin-worth over $12 million at the time-seized by police. In May 2024, seven university students in Chittagong were investigated for moving $85,000 monthly through peer-to-peer trades. These weren’t big operators. These were regular people using apps like LocalBitcoins or bKash to cash out.

How Authorities Track You

You might think you’re hidden if you use a VPN and don’t tell anyone. But Bangladesh’s financial surveillance system is more advanced than most people realize.

• Bank transactions: Any international card payment linked to a crypto exchange is flagged by the Bangladesh Automated Clearing House (BACH). In Q4 2024 alone, 127 such transactions were marked as suspicious.
• Mobile wallets: bKash and Nagad, used by over 80% of the population, monitor transfers for crypto patterns. In 2024, they blocked 2,843 accounts suspected of crypto activity.
• Local agents: Thousands of people use cash brokers to convert Bitcoin to Taka. These agents are the weak link. When one disappears-like Sohel Rana in June 2024, who vanished after collecting $350,000 in cash-police trace the victims. And those victims get questioned, sometimes arrested.

Even if you’re careful, your digital footprint leaves traces. If you use Binance or KuCoin from Bangladesh, those apps still know your IP address, device ID, and payment method. Authorities don’t need to hack you-they just need a warrant to ask the app for your data.

Why People Still Trade

Despite the risks, an estimated 500,000 to 700,000 Bangladeshis still trade crypto. Why? Because the alternatives are worse.

Remittances from overseas workers make up 6.1% of Bangladesh’s GDP-over $21 billion in 2024. Sending money through traditional channels takes days and costs 8-10%. Crypto can deliver funds in minutes for under 1%. For families relying on money from the Middle East or Malaysia, that’s life-changing.

Also, inflation in Bangladesh hit 11.4% in 2024. The Taka lost value fast. Bitcoin, even if illegal, became a store of value for many. People weren’t speculating-they were surviving.

Apps like Binance still work on the Google Play Store in Bangladesh. Why? Because Google doesn’t block them. The government hasn’t forced them to. So users download them, trade them, and hope they won’t get caught.

The Legal Gray Zone No One Talks About

In November 2021, Bangladesh Bank sent a private note to the Criminal Investigation Department (CID) saying: "Trading or owning cryptocurrency is not illegal by itself." That document, CID Case No. 1147/2021, exists. But the bank never made it public. They keep issuing warnings. They keep arresting people. They keep seizing Bitcoin.

This contradiction is intentional. It gives authorities flexibility. They can say, "We warned you," then charge you under money laundering laws. Legal experts call it a "dangerous limbo." You don’t know if you’re breaking the law until you’re already in custody.

One lawyer told me: "If you’re rich and connected, you might get a warning. If you’re a student or a shopkeeper, you get handcuffs."

What About Taxes?

The National Board of Revenue (NBR) doesn’t have a crypto tax law. But they don’t need one. Under the Income Tax Ordinance of 1984, any profit from a transaction is taxable. If you bought Bitcoin at 3 million BDT and sold it for 5 million BDT, you made a 2 million BDT profit. That’s taxable income.

For individuals, that’s up to 30% tax. For businesses, 25%. No one reports it. No one files. But if you’re audited-say, because your bank account suddenly has 10 large crypto-related deposits-the NBR can demand proof of where that money came from. No proof? You owe back taxes, penalties, and interest. And if they suspect fraud, you’re looking at criminal charges too.

How Bangladesh Compares to Neighbors

India taxes crypto at 30% but lets people trade freely. Pakistan is exploring using Bitcoin as a reserve asset. Sri Lanka drafted a full regulatory framework in late 2024. All of them see crypto as something to manage, not eliminate.

Bangladesh is the only country in South Asia that still insists on a total ban. Even the government admits blockchain technology has value. In January 2025, the central bank launched a sandbox for blockchain applications in supply chains and land records. But Bitcoin? Still banned.

That contradiction is costing the country. Dr. B M Mainul Hossain from Dhaka University estimates Bangladesh loses $150 million a year in tax revenue and innovation potential because of the ban. Meanwhile, young entrepreneurs leave for India or Dubai, where crypto is legal.

What Happens If You Get Caught?

Most people don’t go to jail for just holding Bitcoin. But if you’re trading regularly, using local agents, or moving large sums, you’re at high risk.

• First offense: Your bank account gets frozen. Your mobile wallet gets blocked. You get a visit from the BFIU for questioning. You might be forced to sign a statement saying you’ll stop.
• Repeat offense: Police open a case under the Money Laundering Act. Your devices are seized. Your crypto is confiscated. You might be detained for days while they investigate.
• Large-scale activity: Arrest. Prison. Fines. Your family’s savings could be wiped out.

And there’s no appeal process. No clear legal path. No court rulings that say "this is legal." The system is designed to scare people into silence.

Is There Any Way Out?

Right now, no. The Finance Minister said in March 2025: "There are no plans to reconsider the ban." The central bank isn’t budging. Even the push from tech startups and remittance users hasn’t changed anything.

The only real "out" is to avoid trading altogether. Or to use crypto only for personal savings, never converting it to Taka. But that’s nearly impossible-because to cash out, you need a local agent. And every agent is a potential trap.

Some traders say they’ll wait until the law changes. But the law hasn’t changed in eight years. And with no political will to reform, it’s unlikely to change soon.

Bottom Line

Bitcoin trading in Bangladesh isn’t a technical violation. It’s a legal gamble with prison as the stakes. The government doesn’t care if you’re just holding it. They care if you’re moving money. And they’ve built a system to catch you.

If you’re trading, you’re not just risking your money-you’re risking your freedom. And for what? A few percentage points in profit? A faster way to receive remittances? The cost is too high.

The ban won’t stop crypto. It just drives it underground, where the risks are highest and the protections are zero. Until the law changes, the only safe move is to stay out of it.