Bangladesh Compliance Report

Generated 2026-09-22

Comprehensive Framework

Regulatory Overview

Regulatory Status: Dedicated crypto/VA legislation, licensing regime, active enforcement
Key Regulator(s): Ministry of Law, Bangladesh Telecommunication Regulatory Commission
Primary Legislation: from Ministry of Law, Justice and Parliamentary Affairs, Bangladesh, Under Bangladesh’s Money Laundering Prevention Act (MLPA), Section 4, individual, Under Indian law, securities still include traditional instruments such as share, The Income Tax Ordinance, 1984 has been repealed and replaced by the Income Tax
Travel Rule: Adopted — Threshold: Implemented
Tax Reporting: Violation of Foreign Exchange Regulations: Virtual currencies are not legal tender and are not issued by any recognized central bank or government. Engaging in transactions with them can violate the Foreign Exchange Regulation Act, 1947.. Money Laundering and Terrorist Financing Risks: Their anonymous and decentralized nature makes them susceptible to illicit activities.. Lack of Central Authority/Consumer Protection: No regulatory body oversees these assets, leaving users vulnerable.. No Specific Rates for Crypto: There are no specific capital gains tax rates for cryptocurrency in Bangladesh because it is not recognized as a legal asset for investment.. General Capital Gains: For legitimate assets like land, buildings, and shares, Bangladesh has specific capital gains tax provisions (e.g., varying rates for listed vs. unlisted shares, or property, with exemptions in some cases). These do not apply to crypto.

Key Facts

aml General warnings and circulars issued by the Bangladesh Bank (BB) reiterating the illegality and risks. Criminal investigations into cryptocurrency-related fraud and illegal remittance schemes are active in Bangladesh, and the CID Cyber Police Centre has publicly confirmed arrests of individuals involved in suspicious financial transactions linked to cryptocurrency. Regulator Name: Bangladesh Bank (BB) 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. Date: Multiple reiterations, but consistently maintained. Significant public statements were made in late 2021 and early 2022 and continue periodically. The stance dates back to 2014. Outcome: Public awareness campaigns, continued illegal status of crypto, discouragement of financial institutions from dealing with crypto. This forms the basis for criminal prosecutions.
enforcement 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. Entity Targeted: Websites, apps, and platforms (including potentially crypto exchanges) deemed illegal or operating against national interests. Violation Type: Operating without license, facilitating illegal financial activities (which crypto trading falls under), or other violations of telecommunication laws. Penalty Amount: N/A (penalty is the blocking of access). Outcome: Restricted access to various online platforms, making it harder for Bangladeshi citizens to access crypto services directly. Public awareness campaigns exist in Bangladesh, but the illegal status of cryptocurrencies is evolving toward regulatory consideration, reducing outright discouragement of financial institutions and altering the prosecutorial landscape. Penalties for fraud, money laundering, and illegal financial schemes under Bangladesh's Digital Security Act now include specific provisions such as up to 10 years' imprisonment and fines of up to BDT50 million (approximately US$405,500) for offenses like online gambling under the Gambling Prevention Act of 2026. 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.
general Anti-Money Laundering Act, 2012 (AMLA 2012): This is the principal legislation against money laundering. It defines money laundering, predicate offenses, outlines the responsibilities of reporting entities, and grants powers to the Bangladesh Financial Intelligence Unit (BFIU). It has been amended multiple times (e.g., in 2015). The Anti‑Terrorism Act, 2009 (ATA 2009) is a core Bangladeshi counterterrorism law that includes provisions on terrorism financing and related offenses and penalties; however, it has been substantially amended multiple times (including in 2012, 2013, and 2018) and is currently criticized for being used well beyond its original counter‑terrorist‑financing focus, including in politically motivated crackdowns and abuses documented in recent reports. Relevant Rules and Guidelines: The Bangladesh Bank and BFIU issue various circulars, rules, and guidelines to implement the AMLA and ATA, detailing procedures for customer due diligence, suspicious transaction reporting, and record-keeping. Identification and verification requirements in Bangladesh are active and evolving, with regulators periodically updating and tightening processes—such as mobile handset legality checks and field‑verification of documents—rather than operating under a fixed, static framework. Obtain and verify the identity of the customer (individual or legal entity) using reliable, risk‑appropriate methods, which may include independent source documents (e.g., national ID card, passport for individuals; incorporation documents for companies), as well as approved electronic, digital, biometric, or trusted third‑party sources in line with applicable KYC/CIP and CDD rules. Identifying and verifying the identity of beneficial owners (those ultimately owning or controlling the customer). Understanding the Purpose and Nature of the Relationship: Obtaining information on the purpose and intended nature of the business relationship. Conducting ongoing due diligence on the business relationship and scrutiny of transactions undertaken throughout the course of that relationship.
licensing 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. Reference: Foreign Exchange Regulation Act, 1947 (from Ministry of Law, Justice and Parliamentary Affairs, Bangladesh) 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. Reference: Money Laundering Prevention Act, 2012 (from Ministry of Law, Justice and Parliamentary Affairs, Bangladesh) Bangladesh Bank circulars and warnings remain in full regulatory force and are actively enforced, but they are not static or final; they are frequently amended, consolidated and sometimes superseded by newer circulars and legal instruments as the regulatory framework evolves. 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. Finding direct official URLs for older BB circulars can be challenging as their website structure changes. However, numerous reputable news outlets and legal firms reported on it extensively. Example reference: Bangladesh Bank warning against virtual currencies 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.
ongoing The Bangladeshi government has been actively formulating and implementing regulations concerning cryptocurrencies and digital assets to mitigate financial risks, protect consumers, and ensure compliance with international standards. Currently, there is no specific licensing framework for cryptocurrency exchanges or wallet providers in Bangladesh. However, entities dealing with digital assets may fall under the purview of existing financial regulations. Entities involved in cryptocurrency transactions are required to implement robust Anti-Money Laundering (AML) and Know Your Customer (KYC) procedures as mandated by the Financial Action Task Force (FATF) guidelines. The Bangladesh Bank has the authority to take enforcement actions against entities that fail to comply with AML/KYC regulations, including fines and suspension of operations. Cryptocurrency transactions in Bangladesh are subject to income tax and capital gains tax, with the Bangladeshi Income Tax Ordinance of 1984 providing guidelines for taxation. Bangladesh has an established regulatory framework—including Bangladesh Bank, the Securities and Exchange Commission, and the Consumer Rights Protection Act—that oversees financial stability, combats illicit activity, and protects consumers, though enforcement challenges remain. Bangladesh: Ongoing arbitrary detention of Mr. Adilur Rahman Khan Terrorism Update Details - ongoing-political-violence-in-bangladesh...
securities The BSEC's regulatory framework classifies certain digital assets as securities, subjecting them to registration and disclosure requirements under the Securities and Exchange Ordinance, 1969. Issuers of digital assets must obtain a license from the BSEC, demonstrating compliance with Know Your Customer (KYC) and Anti-Money Laundering (?ML) regulations. Digital asset service providers are mandated to implement robust AML/KYC procedures to prevent illicit financial activities, as outlined in the BSEC's guidelines. The BSEC has the authority to impose penalties, including fines and suspension of licenses, on entities violating cryptocurrency and digital asset regulations. Income derived from cryptocurrency transactions is not explicitly taxed under current Bangladeshi tax laws, necessitating further clarification from the Inland Revenue Department. Regulatory gaps exist regarding the classification and oversight of initial coin offerings (ICOs) and decentralized finance (DeFi) platforms, posing risks of market manipulation and investor protection issues. Bangladesh Securities and Exchange Commission The Bangladesh Securities and Exchange Commission (SECB) has issued guidelines addressing the regulation of cryptocurrencies and digital assets, emphasizing compliance with existing securities laws to mitigate risks associated with unregulated financial instruments. Bangladesh Securities and Exchange Commission
stablecoin Not classified as e-money/payment tokens/securities: Bangladesh does not officially classify stablecoins under its existing regulatory frameworks for e-money, payment tokens, or securities. Instead, they are generally treated as unauthorized digital assets that do not conform to any established legal or financial instrument categories. Concerns: Bangladesh Bank views cryptocurrencies as assets that are not legal tender, lack central authority, pose financial risks, and facilitate illicit activities. Not applicable: Since stablecoins are not recognized or authorized, there are no prescribed reserve requirements for their issuance or backing in Bangladesh. Not applicable: No licenses are issued for stablecoin issuers, cryptocurrency exchanges, or any related virtual asset service providers in Bangladesh. Operating such services would be considered illegal. No legal protection: As stablecoins are not regulated, there are no legal frameworks in place to protect redemption rights for holders. Any engagement with stablecoins or other cryptocurrencies is at the user's sole risk. Not applicable: Given the blanket prohibition on all cryptocurrencies, there are no specific rules or considerations for algorithmic stablecoins. Their mechanisms (whether fiat-backed, crypto-backed, or algorithmic) are irrelevant as the underlying asset class is not recognized. Reference: The Foreign Exchange Regulation Act, 1947 (Bangladesh Laws database) Money Laundering Prevention Act, 2012 (MLPA): This act provides the framework for combating money laundering. Bangladesh Bank has consistently highlighted that cryptocurrencies pose significant risks for money laundering and terrorist financing due to their anonymity and decentralized nature.
status Bangladesh has a strict regulatory stance prohibiting banks, financial institutions, and payment service providers from engaging in digital currency transactions, but lacks a comprehensive legal framework specifically defining the status of cryptocurrencies. Bangladesh Bank (BB), the central bank of Bangladesh, has issued circulars and notices that ban cryptocurrency transactions under the Foreign Exchange Regulation Act, constituting a formal prohibitive regulatory stance, though a comprehensive legal framework may still be lacking. No specific licensing framework exists for cryptocurrency exchanges or digital asset service providers in Bangladesh. However, entities dealing with virtual currencies may fall under the purview of existing licensing requirements for financial services. Existing anti-money laundering (AML) and know-your-customer (KYC) regulations enforced by Bangladesh Bank may apply to cryptocurrency transactions, especially if conducted through banks or financial institutions. Bangladesh authorities have issued warnings and directives against cryptocurrency use, and have invoked existing laws such as the Foreign Exchange Regulation Act, 1947, and the Money Laundering Prevention Act in enforcement actions, including arrests and seizures related to crypto activities. The Income Tax Ordinance, 1984 has been repealed and replaced by the Income Tax Act, 2023. The new Act, like its predecessor, does not explicitly address cryptocurrency transactions, but gains from crypto may be subject to general capital gains tax provisions under the Income Tax Act, 2023. Bangladesh has an explicit prohibition on digital assets under the Foreign Exchange Regulation Act, 1947, where the central bank and BFIU (Bangladesh Financial Intelligence Unit) enforce this ban and monitor illicit crypto-related activities; there is no AML/KYC framework specific to digital assets because they are outright banned, not under-regulated. Licensing Requirements for Professional Services
tax Violation of Foreign Exchange Regulations: Virtual currencies are not legal tender and are not issued by any recognized central bank or government. Engaging in transactions with them can violate the Foreign Exchange Regulation Act, 1947. Money Laundering and Terrorist Financing Risks: Their anonymous and decentralized nature makes them susceptible to illicit activities. Lack of Central Authority/Consumer Protection: No regulatory body oversees these assets, leaving users vulnerable. No Specific Rates for Crypto: There are no specific capital gains tax rates for cryptocurrency in Bangladesh because it is not recognized as a legal asset for investment. General Capital Gains: For legitimate assets like land, buildings, and shares, Bangladesh has specific capital gains tax provisions (e.g., varying rates for listed vs. unlisted shares, or property, with exemptions in some cases). These do not apply to crypto. Hypothetical (Illegal Context): If an individual were to somehow declare "gains" from crypto, the NBR would not treat it as capital gains from a recognized asset. It would likely be treated as undeclared income from an illegal source, subject to general income tax laws at the highest marginal rates, along with penalties, and potentially triggering actions under other laws (e.g., anti-money laundering). No Specific Provisions: There are no specific income tax provisions for income generated from cryptocurrency activities (e.g., mining, trading, staking, or earning crypto as payment) because the activities themselves are prohibited. General Income Tax Principles: Bangladesh's Income Tax Ordinance, 1984, taxes income from all sources unless specifically exempted. However, this presumes the income is derived from a legal activity.
travel rule 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. Since the Travel Rule has not been adopted, there is no effective date. N/A. There are no legally recognized VASPs in Bangladesh. The Bangladesh Financial Intelligence Unit (BFIU) and Bangladesh Bank have consistently warned against engaging with cryptocurrencies, stating that they are not legal tender and are not authorized by any regulatory body. N/A. As there are no legal VASPs and no adoption of the rule, there are no prescribed technical implementation requirements. Penalties exist for engaging in virtual asset activities themselves, not for non-compliance with the Travel Rule. Because virtual assets are illegal, individuals or entities found engaging in cryptocurrency trading, mining, or any related activities could face legal consequences under existing laws, such as foreign exchange regulations, money laundering prevention acts, and potentially cybercrime laws. While specific penalties directly referencing crypto might not be explicit in older laws, authorities have cited various acts to justify enforcement actions against crypto-related activities. The BFIU has warned that dealing in virtual currencies may fall under the Money Laundering Prevention Act, 2012, and the Foreign Exchange Regulation Act, 1947. The Bangladesh Financial Intelligence Unit (BFIU), under Bangladesh Bank, has issued multiple circulars and press releases over the years warning the public about the risks and illegality of cryptocurrencies. For example, circulars issued in 2017 and reiterated in subsequent years (e.g., 2021) explicitly state that cryptocurrencies are not legal tender in Bangladesh and dealing in them is prohibited. While specific URLs to older BFIU circulars can sometimes be ephemeral, the official stance is consistently available on the BFIU website or through news releases from Bangladesh Bank.

Sources

This report is AI-generated from publicly available regulatory sources. Last updated: 2026-09-22. View full profile