Anti-Money Laundering Crypto Enforcement in Bangladesh: What You Need to Know

Since 2014, Bangladesh has taken one of the toughest stances on cryptocurrency in Asia-not because it passed a law banning crypto, but because it never allowed it to exist in the first place. The Bangladesh Bank didn’t wait for legislation. It issued warnings. Then more warnings. By 2017, it declared cryptocurrency illegal under existing financial laws. Today, in 2025, that stance hasn’t softened. If you’re mining Bitcoin in Dhaka, trading Ethereum through a TRC20 wallet, or holding crypto as an investment, you’re operating in a legal gray zone that can land you in jail.

How Bangladesh Banned Crypto Without a Law

There’s no specific law in Bangladesh that says, "Crypto is illegal." Instead, the government uses older rules to shut it down. The Foreign Exchange Regulations Act of 1947 makes it illegal to send money abroad without approval. The Anti-Money Laundering Act of 2012 gives authorities power to investigate suspicious financial flows. And the Information and Communication Technology (ICT) Act criminalizes digital activities that threaten national security or financial stability.

The Bangladesh Bank-the country’s central bank-has used these laws to say: any use of cryptocurrency violates financial rules. That includes buying, selling, trading, holding, or mining. They don’t need a new law because they already have tools to punish financial crimes. And they’re not shy about using them.

Who’s Watching? The Enforcement Machine

Three agencies are in charge of making sure crypto stays underground:

• Bangladesh Bank: Issues warnings, instructs banks not to process crypto-related transactions, and tells law enforcement where to look.
• Financial Intelligence Unit (FIU): Tracks suspicious money movements. If someone sends $10,000 in crypto to an overseas wallet, the FIU flags it.
• Criminal Investigation Department (CID): Makes arrests. In 2024, at least five people in Dhaka were jailed for running hidden crypto mining rigs. Authorities found servers in basements, warehouses, even residential apartments-all running 24/7, consuming massive power.

The CID doesn’t arrest people just for owning crypto. They arrest them for violating anti-money laundering laws. If your crypto was used to move money from a scam, or to pay for illegal goods, or to bypass currency controls, you’re the target. The Bangladesh Bank made this clear: ownership isn’t illegal. But using it to launder money? That’s a prison sentence.

Crypto Mining? It’s a Crime

Mining crypto in Bangladesh isn’t just discouraged-it’s criminal. The government sees it as a direct threat to the national power grid and financial control. Electricity subsidies are meant for homes and businesses, not for machines running nonstop to generate Bitcoin.

In 2024, authorities raided five mining operations in Dhaka and Chittagong. One operation had 170 ASIC miners running in a single apartment. The power bill? Over 12,000 kWh per month-enough to power 10 average households. The miners claimed they were "just experimenting." The court didn’t buy it. They were charged under the Anti-Money Laundering Act and the ICT Act. One miner got 18 months in prison.

Compare that to Pakistan, which in May 2025 launched the Pakistan Digital Assets Authority and allocated 2,000 megawatts of electricity for Bitcoin mining. Bangladesh is going the opposite direction: stricter, tighter, and more punitive.

Why the Fear of Crypto?

Bangladesh’s government isn’t against technology. In 2020, it released the National Blockchain Strategy, promoting blockchain for land records, digital IDs, and public services. So why ban crypto but allow blockchain?

The answer is control. Blockchain for government use means centralized oversight-data is tracked, audited, and managed by state agencies. Crypto, on the other hand, is decentralized. No one controls it. No one can freeze a wallet. No one can trace every transaction perfectly.

That’s the real fear. Cryptocurrency enables anonymous transfers. TRC20 wallets can be created in seconds. No KYC. No ID. No paper trail. And Bangladesh has seen the damage crypto scams can do. The MTFE scam in 2021 tricked over 10,000 people into investing $20 million in a fake crypto platform. It vanished overnight. Victims lost life savings. The government didn’t want a repeat.

So they chose to shut it down entirely-even if that means punishing innocent users who just wanted to buy Bitcoin as an investment.

The Tax Question: No Rules, No Clarity

There’s no crypto tax law in Bangladesh. But that doesn’t mean you’re off the hook.

The National Board of Revenue (NBR) applies the Income Tax Ordinance of 1984 to all income, regardless of form. If you sell crypto for profit, that profit is taxable. If you earn crypto as payment for work, it’s income. But there’s no system to track it. No reporting requirement. No form to fill out.

This creates a dangerous gap. People don’t report crypto gains because they can’t. Authorities don’t audit them because they can’t easily trace the transactions. But if you’re caught using crypto for money laundering, the NBR can still come after you for unreported income.

International Pressure Is Building

Bangladesh is not following Financial Action Task Force (FATF) guidelines. FATF’s Recommendation 15 says countries must regulate virtual asset service providers-exchanges, wallets, custodians-with licensing, monitoring, and reporting rules.

Bangladesh does none of that. It doesn’t license anyone. It doesn’t monitor wallets. It doesn’t require reporting. That puts Bangladesh at odds with global financial standards. International banks are wary of dealing with Bangladeshi institutions because they can’t verify if crypto money is flowing through.

Neighboring countries are moving forward. India has a 30% crypto tax and reporting rules. Sri Lanka has licensed exchanges. Pakistan has a national crypto reserve. Bangladesh is falling behind-not because it’s anti-tech, but because it’s anti-risk. And in a world where digital finance is growing fast, that isolation could hurt its economy long-term.

People Are Still Using Crypto-Secretly

Despite the risks, crypto use hasn’t disappeared. It’s gone underground.

People trade through peer-to-peer apps like LocalBitcoins and Paxful. They use P2P transfers via mobile money platforms like bKash and Nagad, disguising crypto payments as "gifts" or "remittances." Some buy USDT (Tether) on international exchanges and send it to TRC20 wallets, then cash out through local agents who accept cash in exchange for crypto.

There’s no official data on how many people do this. But estimates from local fintech analysts suggest 500,000 to 800,000 Bangladeshis hold crypto. Most are young, urban, tech-savvy, and frustrated by slow banking and currency controls.

The government knows. But cracking down on millions of individuals isn’t feasible. So they focus on the big fish: miners, large-scale traders, and those linked to scams or cross-border crime.

What Happens If You Get Caught?

If you’re caught with crypto in Bangladesh, here’s what you might face:

• Seizure of devices: computers, mining rigs, phones
• Freezing of bank accounts linked to crypto transactions
• Interrogation by CID or FIU
• Charges under the Anti-Money Laundering Act or ICT Act
• Jail time: up to 7 years for serious violations

There’s no fine system. No warning letter. No first-time offense exception. If you’re caught, you’re treated like a financial criminal.

What’s Next for Bangladesh?

The Ministry of Finance has the power to introduce new crypto laws. But so far, they’ve chosen silence. The Bangladesh Bank keeps issuing warnings. The CID keeps making arrests. The public keeps using crypto.

There’s a growing voice inside Bangladesh’s tech community asking: Why block blockchain but allow it in government? Why ban crypto when mobile money revolutionized financial inclusion? Why risk isolating a generation of digital natives?

The answer may come from pressure-not from within, but from outside. As global financial institutions demand FATF compliance, Bangladesh may have no choice but to create a regulated framework. But until then, the message is clear: crypto is not welcome. And the consequences are real.