Bangladesh Bank Warns against Cryptocurrency Trading !

Date:20/09/2022 
Article No:23 
Topic:- Bangladesh Bank Warns against 
Cryptocurrency Trading. 
© @kawsarr  

Cryptocurrencies have added a new chapter to economies around the world. Blockchain, Web-3 will rule the next world. Currently developed countries are encouraging the use of cryptocurrency or digital currency one by one. The world's wealthy are also turning to cryptocurrencies. Cryptocurrency has also become very popular as a shopping payment system. Along with that the youth of Bangladesh are also openly and secretly interested in cryptocurrency. The number of crypto users is increasing day by day

But Bangladesh Bank has asked to refrain from transactions in cryptocurrencies. Bangladesh Bank still believes there are financial and legal risks in using cryptocurrencies.

Last Thursday (September 15), Bangladesh Bank issued a public interest warning notice. Bangladesh Bank also refers to it as Clarification Notice.

Earlier in a letter written to the Criminal Investigation Department (CID) of the police, the central bank had stated that the storage, transaction of cryptocurrency is not a crime.

According to Bangladesh Bank, recently the information obtained from various media and internet shows that cryptocurrencies such as Bitcoin, Ethereum, Ripple and Litecoin are being traded in various places. These virtual currencies are not issued by the legal authorities of any country. As a result, no financial claim is recognized against this currency. Transactions in these currencies are not approved by Bangladesh Bank or any other regulatory body. For that reason its use in the Foreign Exchange Control Act, 1947; Anti-Terrorism Act, 2009 and Prevention of Money Laundering Act, 2012 do not support. Transactions with anonymous or pseudonymous counterparties online may inadvertently violate anti-money laundering and counter-terrorism financing laws.

The notification further states that payments and settlements are mainly made in virtual currency in online networks. No central authority or payment system regulatory authority recognizes this currency. Because of that, customers may face various risks including potential financial, legal risks of virtual currency. Bangladesh Bank has requested the public to refrain from promoting and facilitating transactions in virtual currencies like Bitcoin to avoid potential financial and legal risks.

Bangladesh Bank published a circular on December 24, 2017 about cryptocurrency. There was no change in that position. Bangladesh Bank claimed that Bangladesh Bank had sent a letter for the confidential use of an investigating officer in a particular case. That letter has also been presented fragmentarily in some newspapers. It is not generally publicized by any means.

The foreign exchange policy department of Bangladesh Bank issued a letter to the CID on May 18. The letter said, 'Even if the ownership, storage or transaction of cryptocurrency is not recognised, there is no opportunity to call it a crime.

But they have now said in a notification, cryptocurrency or virtual assets or currency exchange, transfer and trade Bangladesh Bank is not allowed. Such transactions are illegal under the Foreign Exchange Control Act. Such transactions in violation of the instructions are punishable offences. Anyone who does so can be jailed and fined.

All parties including banks, mobile financial services (MFS), financial institutions have been informed in this regard by issuing a circular from Bangladesh Bank on Thursday, September 15.

This Report of Bangladesh Bank has been published by the biggest newspapers of the country with great emphasis.

Bangladesh Police and RAB have already arrested many people for illegal bitcoin transactions, money laundering and fraud. After the arrest, all bitcoins held in their accounts were confiscated. Money laundering, fraud and illegal transactions have been cited as reasons

The circular referred to the central bank's cautionary public notice issued in July last year.

The notification said that any virtual currency or cryptocurrency is not approved by Bangladesh Bank. Transactions in such unauthorized currency may result in financial loss or legal trouble.

Besides, in that circular of September 15, the opinion of the Financial Action Task Force working to prevent money laundering and financing of terrorism, the provisions of Lennedanar in approved currency under the Foreign Exchange Regulation Act have been mentioned.

According to the circular, Bangladesh Bank is not authorized to exchange, transfer or trade any virtual asset or currency. Any such transaction in defiance of the instructions shall be an offense punishable under Section 23(1) of the Foreign Exchange Control Act. There is an opportunity to sue under this section. 7 years imprisonment or fine as punishment for the case. or provides for both penalties.

My openion

As the world is now getting involved in the new internet Blockchain and Web-3. And since the world is working on digital currency, I think Bangladesh should also think about cryptocurrency Bitcoin and its use. If Bangladesh is claimed as a digital country, digital currency cryptocurrency must also be excluded. Neighboring country India has already legality of Crypto.

So Bangladesh government should also give legality to crypto in Bangladesh. If a country want to keep pace with the developed world, there is no alternative to cryptocurrency and blockchain.

Anyway, Now crypto users in Bangladesh need to be careful in crypto transactions. According to me, the government will identify crypto users based on their cryptor transactions in P2P . So we have to be careful with bitcoin or other currency transactions on Binance P2P.

Thanks For Reading......