Buying or selling Bitcoin in Bangladesh isn't just risky-it can land you in jail. While many countries are figuring out how to tax or regulate crypto, Bangladesh has taken a hardline stance: Bitcoin trading is banned. And the consequences aren’t theoretical. People have been arrested. Assets have been seized. Bank accounts frozen. This isn’t about speculation or hype-it’s about real legal danger.
How the Ban Works (Even If It’s Not Written in Law)
You won’t find a single law that says, "Owning Bitcoin is a crime." But that doesn’t mean it’s legal. The Bangladesh Bank, the country’s central bank, issued its first warning against Bitcoin in 2014. By 2017, it declared digital currencies "not legal tender" and strictly prohibited their use. Since then, the ban has been enforced through existing laws, not new ones.The real power comes from two statutes: the Foreign Exchange Regulation Act of 1947 and the Money Laundering Prevention Act of 2012 (amended in 2015). Authorities don’t charge you for owning Bitcoin. They charge you for breaking these laws-like moving money across borders without approval, or handling funds linked to "illegal activities." And in Bangladesh’s eyes, crypto transactions almost always qualify.
For example, if you buy Bitcoin using bKash or Nagad, and the transaction looks unusual to the Bangladesh Automated Clearing House (BACH), your account gets flagged. If you’re caught exchanging crypto for cash through a local agent, and that agent gets investigated, you’re dragged in too. The law doesn’t need to mention Bitcoin to punish you for using it.
What Happens When You Get Caught
The penalties aren’t small. Under Section 6 of the Money Laundering Prevention Act, anyone involved in crypto transactions linked to illegal activity can face:- 1 to 10 years in prison
- Fines between 10,000 and 1,000,000 Bangladeshi Taka (roughly $85-$8,500 USD)
These aren’t empty threats. In July 2022, 14 people in Dhaka were arrested for running a crypto exchange that processed $2.3 million in transactions. In February 2023, authorities seized 127 Bitcoin-worth over $12 million at the time-from a trader named Mohammad Ali. In May 2024, seven university students in Chittagong were investigated for facilitating $85,000 in monthly crypto trades through peer-to-peer apps.
Even if you’re not running an exchange, you’re not safe. The Bangladesh Financial Intelligence Unit (BFIU) monitors bank transfers, mobile wallet activity, and international card payments. In Q4 2024 alone, 127 suspicious crypto-linked transactions were flagged. Over 2,800 bKash and Nagad accounts were blocked in 2024 for suspected crypto activity.
How People Still Trade (And Why It’s Dangerous)
Despite the ban, an estimated 500,000 to 700,000 Bangladeshis still trade crypto. How? They’ve built underground systems.Most use local agents-people who take your Bangladeshi Taka and send you USDT (Tether) on your wallet. These agents charge 3-5% fees. But they’re also the biggest risk. In June 2024, 23 traders lost $350,000 when one agent, "Sohel Rana," vanished after collecting payments. No one can be held accountable. No contracts. No recourse.
Others use VPNs to access apps like Binance or KuCoin. Sensor Tower data from March 2025 shows 150,000-200,000 active monthly users in Bangladesh. But these apps aren’t approved by local regulators. They don’t verify users. They don’t report to authorities. And if you’re caught using them, you’re on your own.
Peer-to-peer platforms like LocalBitcoins are still accessible. But every transaction leaves a digital trail. If your bank notices you’re sending money to a known crypto address, they freeze your account. And once that happens, getting it back is nearly impossible.
The Legal Gray Zone: "Owning Isn’t Illegal"-But Everything Else Is
Here’s the twist. In November 2021, the Bangladesh Bank told the Criminal Investigation Department (CID) that "trading, owning cryptocurrency is not illegal"-a position documented in CID Case No. 1147/2021. But that’s not public policy. It’s an internal note.Lawyers call it a "dangerous legal limbo." You can’t be charged just for holding Bitcoin. But if you buy it, sell it, transfer it, or even receive it as payment, you’re now potentially violating foreign exchange rules or money laundering laws. Prosecutors don’t need to prove you knew the law-they just need to show you moved money in a way that looks suspicious.
And that’s why people get caught. A university student sends $500 in Taka to a friend who sends back USDT. The bank flags it. The CID investigates. The student didn’t know they were breaking the law. But ignorance doesn’t protect them.
Taxes? There Are None. But You Still Owe Them
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 you make from trading Bitcoin can be treated as income. That means:- If you’re an individual: up to 30% tax on your gains
- If you’re running a business: 25% corporate tax
But here’s the catch: you can’t declare crypto income. There’s no form. No process. No way to pay it legally. So if you make $10,000 in crypto profits and don’t report it, you’re not just avoiding tax-you’re committing tax evasion under existing law. And tax evasion carries its own penalties.
As of February 2025, NBR Commissioner Md. Moniruzzaman confirmed there are no plans to create a crypto tax system. So you’re stuck: you might owe taxes, but you can’t pay them legally. And if you’re audited? Good luck proving your income came from crypto without documentation the government refuses to recognize.
Why the Ban Stays-And Why It Hurts
The Bangladesh Bank argues crypto threatens financial stability. They worry about money laundering, capital flight, and undermining the Bangladeshi Taka. Remittances make up 6.1% of GDP-$21.1 billion in 2024. The central bank fears crypto could replace formal channels, making it harder to track where money comes from.But critics say the ban is hurting the economy. Dr. B M Mainul Hossain, a finance professor at Dhaka University, estimates Bangladesh loses $150 million a year in potential tax revenue and innovation. Young entrepreneurs can’t build blockchain startups. Developers leave the country. Local tech hubs die because they can’t accept crypto payments.
Meanwhile, neighboring countries are moving forward. India taxes crypto but allows trading. Pakistan is exploring Bitcoin reserves. Sri Lanka drafted a regulatory framework in late 2024. Bangladesh? Finance Minister Abul Hassan Mahmood Ali said in March 2025: "There are no plans to reconsider the cryptocurrency ban."
What You Should Know If You’re Still Trading
If you’re still involved in crypto in Bangladesh, here’s the reality:- You are not protected by law. No one will help you if you’re scammed.
- Your bank account can be frozen without warning. No appeal process.
- Local agents are not licensed. They can disappear anytime.
- Using a VPN doesn’t make you anonymous. Your mobile number, bank ID, and IP address are tracked.
- If you make a profit, you owe taxes-but you can’t pay them legally.
- One transaction can trigger a full investigation.
There’s no safe way to trade Bitcoin in Bangladesh. The law doesn’t care if you’re just trying to send money to family overseas or invest for the future. If you use crypto, you’re playing Russian roulette with your freedom.
Is it illegal to just own Bitcoin in Bangladesh?
Technically, no-owning Bitcoin alone isn’t a crime under Bangladeshi law. But in practice, if you’re caught holding Bitcoin, authorities will investigate how you got it. If they find any transaction linked to foreign exchange rules, money laundering, or unlicensed exchanges, you can be prosecuted. Ownership isn’t the issue-it’s what you do with it.
Can I get arrested for using Binance or KuCoin in Bangladesh?
Yes. While these apps are still downloadable on Google Play in Bangladesh, using them violates the Bangladesh Bank’s 2017 ban. Authorities monitor international card payments and mobile wallet activity. If you’re detected making crypto trades, you can be investigated by the CID or BFIU. Arrests have happened before-especially if you’re moving large amounts or acting as an intermediary.
What happens if my bKash or Nagad account gets frozen?
Once flagged for crypto activity, your account can be frozen indefinitely. You won’t get a clear reason. You can’t appeal through normal banking channels. You’ll likely need to go to the Bangladesh Bank or BFIU with documentation-which they may not accept. Many users never get their money back. In 2024, over 2,800 accounts were blocked for suspected crypto use.
Do I have to pay taxes on Bitcoin profits in Bangladesh?
Legally, yes-under the Income Tax Ordinance of 1984, crypto profits are considered income and subject to 25-30% tax. But there’s no official way to report or pay it. If you don’t declare it, you risk tax evasion charges. If you try to pay, there’s no system to accept it. You’re stuck in a legal trap.
Why doesn’t Bangladesh just legalize crypto like India or Sri Lanka?
The Bangladesh Bank believes crypto threatens its control over the national currency and remittance flows. With over $21 billion in annual remittances, the central bank fears unregulated crypto could bypass official channels, making it harder to monitor money flows and enforce foreign exchange rules. They’ve also cited risks of money laundering and financial instability. Despite pressure from tech groups, officials have repeatedly said they have no plans to change the ban.
Is blockchain technology allowed in Bangladesh?
Yes-just not cryptocurrency. The 2020 National Blockchain Strategy supports using blockchain for public services, supply chains, and land records. In January 2025, the Bangladesh Bank’s Innovation Hub launched a sandbox for non-crypto blockchain applications. The government clearly separates the technology from digital currencies. You can build a blockchain solution, but you can’t use Bitcoin on it.