Legal Crypto In Bangladesh

Cryptocurrency Legality in Bangladesh

Introduction

The situation with cryptocurrencies in Bangladesh is quite restrictive, Bangladeshi central bank Bangladesh Bank banned the use of cryptocurrencies in 2017. Digital money like Bitcoin is not considered as a legally enforceable “Tender” and therefore its use in financial transactions is prohibited. Introduction This note summarizes the legal regime, exchange activity, and Decentralized Finance (DeFi) and Non-Fungible Token (NFT) markets in Bangladesh. A table of essential legal information is provided as an appendix, making this a simple, no-nonsense companion to a complex and nuanced personal moral and legal issue.

Legality of Cryptocurrency

In 2017, the Bangladesh Bank announced that the use of cryptocurrencies are illegal according to a statement in the Bangladesh Financial Intelligence Unit according to the "Anti-terrorism Act". The central bank is concerned about financial instability, money laundering and lack of regulation. The Ban on any form of involvement in cryptocurrencies, including trading, mining, and settlements is absolute and non-compliance can even invite penalties under existing financial rules. However, despite the ban, informal activity in cryptocurrencies around peer-to-peer networks has continued, along with the use of underground and unregulated exchanges, while enforcement has been unclear and uneven, leaving the country’s cryptocurrency activities operating in a gray area, with individuals at a legal risk.

Regulatory Framework

There is no formal regulation for the cryptocurrency market in Bangladesh, as none of the laws mention digital currencies. The Bangladesh Bank uses the countrys financial laws to enforce its ban. The Foreign Exchange Regulation Act of 1947 (FERA) controls any foreign exchange and prevents any unauthorized foreign exchange transactions under the assumption that they would contravene other laws or rules, that aiming to regulate cross-border transactions and banning illegal exchange like the virtual currency transactions. Cryptocurrency transactions are punishable under the 2012 Money Laundering Prevention Act for the risk of money laundering and terrorism financing. Furthermore, an essential 2017 notice from the Bangladesh Bank along with the subsequent cautions effectively ban the use of crypto, citing risks of financial crime and defiance of regulators. There are no specific rules for DeFi or NFTs, which come under a wider ban on virtual currency transactions.

Summary of Cryptocurrency Legal Framework in Bangladesh

Aspect	Details
Legal Status	Cryptocurrencies are not legal tender; their use is illegal.
Primary Regulator	Bangladesh Bank
Key Legislation	Foreign Exchange Regulation Act, 1947; Money Laundering Prevention Act, 2012
Penalties	Prosecution under anti-money laundering or foreign exchange laws.
Specific Crypto Regulation	None; general financial laws apply.
DeFi/NFT Regulation	No specific regulations; covered under cryptocurrency ban.

Methods of Exchange

No licensed cryptocurrency exchanges are allowed to operate in Bangladesh. From foreign exchange such as Binance or Coinbase, they are not authorized and handling is illegal. Weekend trading takes place on peer-to-peer platforms such as LocalBitcoins, Paxful and CoinMex, allowing for direct transactions, usually made through bank transfers or mobile apps like bKash and Nagad, and occasionally in cash. There are also transactions on social media platforms, like Facebook groups, as well as on messaging apps like Telegram and WhatsApp, where buyers and sellers privately settle on trades. Another way to trade OTC is through direct big deals, made directly between parties in some cases, with intermediaries. These techniques are unmonitored and present the participants with risk of fraud, scams as well as legal repercussions.

DeFi Market

Decentralized Finance apps, a class of applications that facilitate P2P financial services (e.g. lending, trading), are not technically up-and-running in Bangladesh because of the cryptocurrency ban. DeFi protocols, such as Uniswap or Aave, depend on cryptocurrencies like Ethereum, which are illicit. There may still be some people in China using decentralized wallets and VPNs to reach DeFi platforms, but that is also not on any large scale and is illegal. There is very little public DeFi visibility and no local DeFi projects or businesses.

NFT Market

NFTs (non-fungible tokens) that are non-transferable because of their use of Crypto. There are no official NFT markets in Bangladesh, and NFT trades are covered by the cryptocurrency ban. Some Bangladeshi artists might use platforms like OpenSea or Rarible that mask their identities, and offshore accounts, but the scale is tiny and the legal risks are still great.

Useful Information

• Position of Central Bank: The Bangladesh Bank has banned the use of cryptocurrencies for its risk of money laundering and financial instability.
• Legal Threats: Anyone involved in cryptocurrency trade can be persecuted and prosecuted under FERA or Money Laundering Prevention Act.
• Unofficial Trading: Trading through Peer to peer exchanges, social network groups, and over the counter trading is widely used but isn’t monitored or regulated.
• Global Exchange Access: Access the world’s largest exchanges even if you are based in a country where exchanges like Binance or Coinbase are prohibited or you are forced to use virtual private networks, which expose you to legal and security liabilities.
• Problems of DeFi and NFT: Both industries are immature because of the ban on cryptocurrency and lack of regulation.
• Enforcement: Inconsistent enforcement leaves a gray area, though penalties are stiff if violations are found.
• Outlook: There is no evidence of regulatory relief as of May 23, 2025, and the industry is still illicit.

Conclusion

Crypto in Bangladesh is constricted by extremely high barriers, a ban being imposed since 2017 by the Bangladesh Bank. Although existing financial laws, such as the Foreign Exchange Regulation Act and the Money Laundering Prevention Act, can be applied against cryptocurrency activities, DeFi or NFTs are not specifically regulated. Queen Ijeoma, 26, says informal trading continues on peer-to-peer platforms and social media, but the risks are high for those involved. The DeFi and NFT opportunities are still in their infancy because of regulatory hurdles and infrastructure limitations. Unless legislation changes, the crypto environment in Bangladesh is small and underground.