Bangladesh -- Licensing Requirements Regulatory Overview

**Reference:** Foreign Exchange Regulation Act, 1947 (from Ministry of Law, Justice and Parliamentary Affairs, Bangladesh)

**Money Laundering Prevention Act, 2012 (MLPA):** The BB has highlighted the significant risks of money laundering and terrorist financing associated with the anonymity and unregulated nature of cryptocurrencies. While not specifically mentioning "virtual assets," engaging in transactions that facilitate money laundering through any means would fall under this act.

**Reference:** Money Laundering Prevention Act, 2012 (from Ministry of Law, Justice and Parliamentary Affairs, Bangladesh)

Bangladesh Bank circulars and warnings remain in full regulatory force and are actively enforced, but they are not static or final; they are frequently amended, consolidated and sometimes superseded by newer circulars and legal instruments as the regulatory framework evolves.

**FE Circular No. 15 of 2017 (December 24, 2017):** This was one of the earliest and most direct prohibitions. The BB warned against dealing in virtual currencies like Bitcoin, stating they are not legal tender, are not approved by the BB, and carrying out transactions with them could lead to violations of FERA and MLPA.

*Finding direct official URLs for older BB circulars can be challenging as their website structure changes. However, numerous reputable news outlets and legal firms reported on it extensively.* Example reference: Bangladesh Bank warning against virtual currencies

**Circular No. 34 (of 2021) on Foreign Exchange Transactions (October 14, 2021):** This circular reiterated the ban, explicitly stating that "virtual assets" (including cryptocurrencies like Bitcoin, Ethereum, Ripple, Litecoin) are not legal tender and are not permitted for transaction or exchange within Bangladesh. It also warned about associated risks and legal consequences.

*Again, direct official BB URLs can be difficult for specific circulars. Search "Bangladesh Bank Circular 34 virtual assets 2021" for news reports and summaries.* Example reference: Bangladesh Bank reiterates warning against virtual currencies

**Cryptocurrency Exchanges:** Operating an exchange for buying, selling, or trading cryptocurrencies is prohibited.

**Custody Providers:** Providing custody services for virtual assets is not permitted.

**Payment Processors:** Engaging in payment processing or facilitating transactions involving cryptocurrencies is prohibited.

**Neither a registration nor a licensing regime exists for virtual assets in Bangladesh.**

The current approach is one of **outright prohibition and warning** against engaging in any activities related to cryptocurrencies.

Significant Capital Requirements: To ensure financial stability and protect consumers.

Bangladesh has committed to implementing robust AML/KYC procedures in line with FATF recommendations for VASPs, but remains on the FATF grey list due to ongoing strategic AML/CFT deficiencies.

Local Presence: Requiring a registered entity with a local registered office address in Bangladesh, which does not mandate physical office space.

**There is no application process for virtual asset licenses in Bangladesh** because such licenses are not issued.

Under Bangladesh’s Money Laundering Prevention Act (MLPA), Section 4, individuals convicted of money laundering are subject to a statutory imprisonment range of 4 to 12 years, with the precise term within that range determined by the court based on the nature, severity, and value of the offense.

Asset forfeiture is a legal process in which authorities confiscate property connected to alleged criminal activity, including assets used in, derived from, or otherwise linked to crime, sometimes through in rem proceedings that do not require a criminal conviction and can extend beyond only the assets directly involved in specific illegal transactions.

Under Indian law, securities still include traditional instruments such as shares, scrips, stocks, bonds, debentures, debenture stock or other marketable securities of a like nature, but the legally recognized scope of “securities” has been expanded by subsequent amendments to also cover additional instruments (e.g., various derivatives and other specified financial products), so that traditional list is no longer a complete standalone definition of securities.

Unit shares, and any instrument declared by the Commission to be a security.

**Warnings to Financial Institutions:** Bangladesh Bank has repeatedly issued warnings to all banks and financial institutions against dealing in, facilitating, or promoting cryptocurrencies. These warnings serve as an instruction to financial institutions to block transactions related to crypto.

**Prohibition on Use and Exchange:** Law enforcement and regulatory bodies have acted against individuals and groups involved in unauthorized foreign exchange transactions or money laundering using cryptocurrencies. For instance, there have been reports of arrests for operating illegal crypto exchanges or facilitating crypto transactions that violate the Foreign Exchange Regulation Act, 1947, and the Money Laundering Prevention Act, 2012. These are generally broader criminal charges, not specific securities violations related to crypto.

**Preventing Capital Outflow:** The government views cryptocurrencies as a potential channel for capital flight and illegal remittances, leading to vigilance and action against such activities.

**Bangladesh Bank Circular (December 26, 2017) - Prohibition on Virtual Currencies:**

**Content:** This circular explicitly warned against the use of virtual currencies like Bitcoin, stating they are not legal tender, lack central authority, are prone to money laundering and terrorist financing, and carry risks for users. It urged financial institutions to take necessary measures to prevent transactions involving virtual currencies.

*Direct BB URL is often not publicly archived for older circulars in an easily accessible format. However, its content is widely cited by legal firms and news outlets in Bangladesh.*

**Bangladesh Bank Circular (July 27, 2021) - Reiterating Warnings:**

**Content:** Reaffirmed the position from the 2017 circular, reiterating the prohibition on all forms of virtual currencies/cryptocurrencies and emphasizing the associated risks including money laundering, terrorist financing, and foreign exchange violations. It specifically mentioned penalties under the Money Laundering Prevention Act, 2012, and the Foreign Exchange Regulation Act, 1947.

For BB (brick‑and‑mortar–related) requirements in the BD licensing context, the key governing materials are now directly and publicly accessible via stable, English‑language URLs, and their content is comprehensively documented in those sources.

**The Securities and Exchange Ordinance, 1969:**

This is the primary legislation governing securities in Bangladesh. While it doesn't mention cryptocurrencies, it would be the foundational law if BSEC were ever to regulate them.

**URL (Ministry of Law, Justice and Parliamentary Affairs - Bangladesh):**

http://bdlaws.minlaw.gov.bd/act-details-180.html (Bengali version, English version link usually available on the same portal or through legal databases).