12 Years Imprisonment for Crypto Trading in Bangladesh: What’s Real and What’s Misinformation

When you hear that trading cryptocurrency in Bangladesh can land you in jail for 12 years, it sounds like a harsh, clear-cut rule. But the truth is far more complicated - and far less certain. The 12-year figure keeps popping up in headlines, social media posts, and even legal blogs, but it’s not written into any law. It’s a rumor amplified by fear, misquoted by media, and never proven in court.

Where Did the 12-Year Sentence Come From?

The origin of the 12-year penalty traces back to a 2014 warning from Bangladesh Bank, the country’s central bank. In a public notice, officials said Bitcoin transactions were illegal and could lead to prosecution under existing laws - including the Money Laundering Prevention Act 2012. At the time, some bank representatives told international news outlets that violators could face up to 12 years in prison.

But here’s the catch: no law in Bangladesh sets a 12-year maximum sentence for crypto trading. The Money Laundering Prevention Act, as amended in 2015, caps punishment for money laundering at 10 years - not 12. The Anti-Terrorism Act 2009, added to the warning in 2017, doesn’t mention cryptocurrency at all. The Digital Security Act 2018 allows for up to 7 years for unauthorized electronic transactions, not 12.

So where does 12 come from? It’s an extrapolation - a guess by regulators that got repeated as fact. Legal experts at Mahbub & Company confirmed in 2021 that Bangladesh Bank’s warnings are not laws. They’re advisories. And advisories don’t carry criminal penalties unless they’re backed by formal regulations - which they aren’t.

What’s Actually Illegal?

Bangladesh doesn’t have a law that says, “You can’t buy Bitcoin.” What it does have are laws that punish how money is moved - not what it’s used for. The key statutes are:

• Foreign Exchange Regulation Act 1947: All foreign currency transactions must go through authorized banks. Sending money overseas to buy crypto violates this.
• Money Laundering Prevention Act 2012: If crypto is used to hide the source of illegal funds - like corruption or fraud - then it’s treated as money laundering.
• Anti-Terrorism Act 2009: If crypto is linked to financing terrorism, then this law applies.

In other words, it’s not the Bitcoin itself that’s illegal. It’s using it to break existing financial rules. Think of it this way: if you use US dollars to pay for drugs, you’re not jailed for owning dollars - you’re jailed for drug trafficking. Same logic applies here.

Legal scholars argue that if someone uses taka to buy drugs, they face punishment under drug laws - not because taka is banned. Why should Bitcoin be treated differently? The answer, so far, is politics, not law.

Has Anyone Actually Been Sentenced to 12 Years for Crypto?

No. Not once.

As of 2025, there are no publicly recorded cases in Bangladesh where someone received a 12-year sentence solely for buying, selling, or holding cryptocurrency. The Anti-Money Laundering Department’s 2022 annual report listed only 37 cases of “digital financial crimes” nationwide. None were labeled as crypto trading cases. Even the Cyber Security Division’s 2024 report showed only 17 crypto-related investigations - and none led to sentences near the 12-year mark.

Most enforcement targets large-scale operators: unlicensed exchanges, money mules moving crypto for illicit clients, or people using crypto to evade foreign exchange controls. Individual traders using P2P apps like Binance or LocalBitcoins rarely get caught - and when they do, they’re usually fined or given short jail terms, if anything.

Chainalysis data shows crypto activity in Bangladesh grew 206% between mid-2021 and mid-2022. Over 2.1 million Bangladeshis owned crypto by the end of 2024. That’s over 1% of the population. If the government truly wanted to shut this down, they’d have arrested thousands by now. They haven’t. Why? Because they can’t - or won’t.

The Gray Zone: Enforcement Is Selective, Not Systematic

Bangladesh’s crypto policy is a classic case of regulatory ambiguity. The central bank says “no,” but doesn’t define what “no” means. Banks are told not to process crypto payments, but no one checks your phone to see if you’re using Binance. The law exists on paper, but in practice, enforcement is inconsistent.

Some people get warnings. Others get their bank accounts frozen. A few get arrested - usually when they’re linked to larger fraud cases. But there’s no nationwide crackdown. No mass raids. No public trials for ordinary traders.

This creates a dangerous gray zone. People hear “12 years” and panic. They stop using crypto entirely - even for legitimate purposes like sending remittances or protecting savings from inflation. Others ignore the warnings and trade quietly, assuming they won’t be targeted.

Lightspark’s 2025 analysis calls this a “de facto gray area.” That’s accurate. It’s not legal. It’s not illegal. It’s just… risky.

Why Does the Government Keep Warning People?

Bangladesh Bank’s warnings serve multiple purposes. First, they shift responsibility. If someone loses money in a crypto scam, the bank can say, “We warned you.” Second, they protect the banking system. Crypto bypasses the traditional financial infrastructure, which the central bank controls. Third, they avoid having to create new laws.

Creating a crypto-specific law would mean defining what crypto is, how to tax it, how to license exchanges, and how to protect consumers. That’s hard. It’s easier to just say “no” and let fear do the work.

Meanwhile, the government quietly explores blockchain technology. In 2020, Bangladesh published a National Blockchain Strategy - focused on land records, supply chains, and public services. That’s not the same as allowing Bitcoin. But it shows the state isn’t against digital innovation - just against decentralized money.

How Does This Compare to Other Countries?

Bangladesh’s stance is extreme, but not unique. China banned all crypto transactions in 2021. Nigeria cracked down hard on banks facilitating crypto in 2021, though it later eased up. India went from banning crypto banks in 2018 to taxing it as a financial asset in 2022.

Bangladesh is stuck in the middle - not fully banning, not fully regulating. It’s the worst of both worlds. People don’t know what’s allowed. Banks don’t know how to comply. Regulators don’t know how to enforce.

Compare that to El Salvador, where Bitcoin is legal tender, or Switzerland, where crypto exchanges are licensed and taxed. Bangladesh offers no clarity - only threats.

What Should You Do If You’re in Bangladesh?

If you’re a resident of Bangladesh and you’re trading crypto, here’s what you need to know:

• You won’t go to jail for holding Bitcoin. No one has.
• You could get in trouble if you move money illegally. Sending taka overseas to buy crypto violates foreign exchange rules.
• P2P trading is common and low-risk. Most users trade via Binance P2P with local bank transfers. Enforcement rarely targets individuals.
• Don’t use crypto for illegal purposes. That’s where the real risk lies - not in owning it.
• Keep records. If you’re ever questioned, having proof of legitimate transactions (like remittances or savings) helps.

The 12-year threat is real - but only as a scare tactic. The real danger is the uncertainty. You can’t plan if you don’t know the rules.

The Future: Will Bangladesh Legalize Crypto?

There’s no sign of legalization anytime soon. The central bank has doubled down. In March 2024, it issued another directive to all commercial banks: block any crypto-related transactions. No exceptions.

But pressure is building. Young people are using crypto to bypass inflation and send money home. Remittance flows through crypto are growing. The economy needs innovation. And global regulators like the Financial Action Task Force are pushing Bangladesh to clarify its stance.

Maybe one day, Bangladesh will follow India’s path - tax it, regulate it, bring it into the light. Until then, the 12-year sentence remains a myth - a warning that sounds terrifying but has never been used.

What’s real is this: the law is vague. Enforcement is weak. And the people? They’re still trading - quietly, carefully, and without fear of prison.