On paper, owning Bitcoin or Ethereum in Bangladesh isn’t illegal. But if you try to trade it, mine it, or even hold it in a wallet, you could end up in jail. That’s the reality in Bangladesh as of 2026 - a country where cryptocurrency isn’t explicitly banned by law, but every move you make with it could trigger a criminal investigation.

How Bangladesh’s Crypto Ban Works Without a Law

Bangladesh doesn’t have a single law that says, "Crypto is illegal." Instead, it uses existing financial rules to crush crypto activity. The Bangladesh Bank is the central bank of Bangladesh, established in 1972, responsible for monetary policy and financial system oversight has been issuing warnings since 2014. By 2017, it declared cryptocurrency transactions illegal under the Foreign Exchange Regulations Act of 1947 and the Anti-Money Laundering Act of 2012. These laws were never written for Bitcoin - but now they’re the main tools used to arrest people.

The Financial Intelligence Unit (FIU) monitors suspicious transactions. If someone sends money to a TRC20 wallet or uses a crypto exchange like Binance to buy Bitcoin, the FIU flags it. The Criminal Investigation Department (CID) then steps in. In 2024, at least 17 people were arrested in Dhaka for running hidden crypto mining rigs. Authorities didn’t charge them with "owning crypto." They charged them with violating anti-money laundering laws and foreign exchange rules.

Why Mining Is a Direct Crime

Crypto mining is treated as a serious offense. It’s not just about using electricity - it’s about bypassing the entire financial system. Mining requires hardware, power, and internet. In Bangladesh, where power grids are unreliable and electricity is subsidized, running mining rigs is seen as stealing public resources and enabling illegal capital flight.

The Information and Communication Technology (ICT) Act is also used here. Section 57 of this law criminalizes digital activities that "harm national security or public order." Authorities have used it to justify shutting down mining farms, seizing computers, and arresting operators. One miner in Chittagong was sentenced to two years in 2023 after police found 42 ASIC miners in his garage. He wasn’t charged with crypto - he was charged with "illegal financial activity under the ICT Act."

What Happens When You Get Caught

There’s no fine. No warning. No license to apply for. If you’re caught trading or mining crypto, you’re arrested. The charges are usually under:

• Foreign Exchange Regulations Act of 1947 (unauthorized cross-border transfers)
• Anti-Money Laundering Act of 2012 (structuring transactions to hide origin)
• ICT Act Section 57 (digital crime against state interests)

Penalties can include jail time from 6 months to 7 years. There’s no bail process for crypto-related arrests - the court treats them as high-risk financial crimes. In 2024, a Dhaka-based trader who sent $120,000 in Bitcoin to a Malaysian exchange was sentenced to 4 years. His defense? "I didn’t know it was illegal." The judge didn’t accept it.

Blockchain Is Fine - Just Not Crypto

Here’s the contradiction: Bangladesh’s government loves blockchain - but hates cryptocurrency.

In 2020, the Bangladesh Computer Council launched the National Blockchain Strategy. It’s designed to digitize land records, voter IDs, and tax systems using blockchain. The government even partnered with foreign tech firms to build public blockchain networks.

But if you try to use that same technology to send money to a friend or buy Bitcoin? That’s a crime. The disconnect is glaring. One part of the government is building secure digital ledgers for public services. Another part is arresting people for using the same tech to move money privately.

Why People Still Use Crypto Anyway

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

People use peer-to-peer platforms like LocalBitcoins and Paxful. They trade in cash through trusted networks. Some use Telegram groups to match buyers and sellers. Others convert crypto to stablecoins like USDT, then send them via TRC20 wallets - which are nearly impossible to trace without access to blockchain analytics tools Bangladesh doesn’t have.

Remittance workers abroad are a big driver. Many Bangladeshis working in the Middle East send money home through crypto because traditional channels like Western Union charge 10% and take days. Crypto can be faster and cheaper - even if it’s risky. One 2023 survey by a Dhaka-based research group found that 1 in 12 urban adults had used crypto in the past year, mostly for remittances.

How Bangladesh Compares to Its Neighbors

Bangladesh is an outlier in South Asia.

Pakistan, just next door, created the Pakistan Digital Assets Authority (PDAA) in May 2025. It licenses exchanges, allocates 2,000 megawatts of power for mining, and even created a National Crypto Committee. Pakistan’s informal crypto market hit $25 billion in 2023.

India allows crypto trading with taxes. Sri Lanka lifted its ban in 2023. Nepal still restricts it - but doesn’t arrest people. Bangladesh is the only country in the region that treats crypto ownership as a potential criminal act.

This isolation is starting to hurt. Foreign investors avoid Bangladesh. Local startups can’t build DeFi tools. Even fintech firms that work with mobile money - like bKash and Nagad - won’t touch crypto-related projects for fear of legal exposure.

International Pressure Is Building

Bangladesh is not compliant with the Financial Action Task Force (FATF) standards. FATF Recommendation 15 requires countries to regulate virtual asset service providers. Bangladesh doesn’t even recognize them as a category.

The FATF has flagged Bangladesh for "high risk" in its 2025 global report. That means banks in the EU and U.S. now treat Bangladeshi financial institutions as high-risk. It makes international transfers harder, increases compliance costs, and pushes more people toward crypto just to get money out.

There’s growing pressure from the IMF and World Bank to reform. But so far, the Ministry of Finance has shown no interest in changing course. The official line remains: "Crypto threatens financial stability. We must protect the public."

What About Taxes?

No one knows.

The National Board of Revenue (NBR) says it applies the Income Tax Ordinance of 1984 to crypto profits. But there are no forms, no guidelines, no reporting system. If you make $10,000 trading Bitcoin, you’re supposed to declare it. But how? Where? The NBR doesn’t have a crypto tax form. So people don’t report. And the government doesn’t audit.

This creates a gray zone: crypto is illegal to trade, but you’re technically supposed to pay tax on profits. It’s a trap. Report it, and you admit to a crime. Don’t report it, and you risk tax fraud charges.

Who’s Really at Risk?

It’s not the wealthy. They have lawyers and offshore accounts.

It’s the young tech workers, the remittance senders, the small traders, the students learning blockchain. The people who don’t have access to legal advice or political connections. The ones who see crypto as a way out of a broken financial system.

One 23-year-old student in Sylhet was arrested in 2024 for buying $300 worth of Ethereum to pay for an online course. He didn’t sell it. He didn’t mine. He just bought it. He spent three months in jail before the case was dropped - but his laptop was seized, and his university suspended him.

The Future: Will Bangladesh Change?

Right now, the government shows no sign of softening. The Bangladesh Bank still issues quarterly warnings. The FIU still monitors wallet addresses. The CID still raids homes.

But global trends won’t stop. More people will use crypto. More remittances will flow through it. More startups will try to build on it. And as neighboring countries like Pakistan move toward regulation, Bangladesh’s isolation will become an economic liability.

Either the government will update its laws - or it will keep arresting people who are just trying to use technology that the rest of the world has already accepted.

For now, the message is clear: In Bangladesh, crypto isn’t just risky. It’s dangerous.