Centralized exchange in Bangladesh

In Bangladesh, cross‑border foreign exchange transactions are governed by the Foreign Exchange Regulation Act, 1947 (as amended), which remains in force and is administered by Bangladesh Bank. Bangladesh Bank has stated via circulars that cryptocurrencies/virtual currencies are not legal tender in Bangladesh and has warned against their use, but there is no explicit, publicly available provision in the Act itself or authoritative judicial ruling that categorically deems every cryptocurrency transaction—especially solely by virtue of being a “currency”—to be a violation of the Foreign Exchange Regulation Act, 1947. Rather, potential violations would arise where such transactions fall within regulated foreign exchange or cross‑border payment activities without required Bangladesh Bank permission.

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.

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.

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.

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

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

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.

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.

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.

Regulator Name: Bangladesh Bank (BB)

Violation Type: Engaging in cryptocurrency transactions, which is considered illegal under existing foreign exchange regulations (Foreign Exchange Regulation Act, 1947) and anti-money laundering laws (Money Laundering Prevention Act, 2012). BB states crypto carries high risks of money laundering, terror financing, and capital flight.

No, the FATF Travel Rule has not been adopted in Bangladesh. This is because the underlying activity of dealing in virtual assets itself is considered illegal and unauthorized by the central bank and the government.

N/A. There are no legally operating VASPs, and thus no thresholds for Travel Rule implementation.

FATF Mutual Evaluation Report (MER) for Bangladesh:

Key Finding (from the MER): The report highlights that Bangladesh has not taken steps to regulate or license VASPs because virtual assets are not permitted in the country. It states that the regulatory framework for virtual assets is non-existent as financial institutions are prohibited from providing services to VAs, and VAs themselves are prohibited.

Entity Targeted: General public, financial institutions, and implicitly, anyone involved in cryptocurrency. Violation Type: Engaging in cryptocurrency transactions, which is considered illegal under existing foreign exchange regulations (Foreign Exchange Regulation Act, 1947) and anti-money laundering laws (Money Laundering Prevention Act, 2012). BB states crypto carries high risks of money laundering, terror financing, and capital flight. Penalty Amount: N/A (for a warning), but the underlying laws carry severe penalties (fines, imprisonment, asset forfeiture) for non-compliance. Outcome: Public awareness campaigns, continued illegal status of crypto, discouragement of financial institutions from dealing with crypto. This forms the basis for criminal prosecutions.

Entity Targeted: Individuals running illegal multi-level marketing (MLM) schemes using crypto, conducting "digital hundi" (informal remittance) via crypto, or engaging in crypto-related scams. Violation Type: Fraud, money laundering, operating illegal financial schemes, breach of Digital Security Act. Penalty Amount: Varies upon conviction (fines and imprisonment). Asset seizures occur during arrest. Specific penalty amounts are not publicly available at the time of arrest or often even immediately after conviction. Outcome: Arrests, ongoing investigations, disruption of illegal schemes, seizure of assets. Violation Type: Money laundering, violation of Foreign Exchange Regulation Act, illegal hundi operations. Penalty Amount: Varies upon conviction. Outcome: Arrests, disruption of illegal remittance networks.

Outcome: Arrests, ongoing investigations, disruption of illegal schemes, seizure of assets.