Kamruzzaman Bablu :
Bangladesh Bank is yet to recognize cryptocurrency as a legal currency, but has made it clear that the ownership or transaction of the digital currency is not a crime. The Foreign Exchange Policy Department of the central bank made the clarification in response to an inquiry by the Criminal Investigation Department (CID) of Police.
But on the other hand, CID on Wednesday said that any kind of transaction using of cryptocurrency, such as Bitcoin, is illegal.
Kamrul Ahsan, additional deputy inspector general of CID, said that transactions made through cryptocurrency would violate three laws – the special powers act, the foreign exchange regulation act and anti-corruption laws.
These contradictory statements from two sides made confusion and rises question that is the cryptocurrency illegal or not?
Earlier in May, in a letter sent by the Foreign Monetary Policy Division of Bangladesh Bank to the Criminal Investigation Department (CID) of the police, the central bank had said that ownership, protection or transaction of cryptocurrency was not a crime.
It also said that the BB didn’t change its previous stance not to recognise cryptocurrency, according to a letter to the CID, issued by assistant director of the BB department Shafiul Azam dated May 18 last.
“Even if the ownership, preservation or transaction of cryptocurrency is not recognised, it does not appear to be a crime,” he explained the central bank’s position.
According to the letter, transactions in virtual currencies can, however, be listed as crimes in the second phase of the Foreign Exchange Control Act 1947, Anti-Terrorism Act 2009 and the Prevention of Money Laundering Act 2012.
Bangladesh Bank Spokesperson and Executive Director Md. Serajul Islam said the central bank’s position didn’t change at all.
“We don’t recognise cryptocurrency as legal currency,” he told.
The BB has so far not allowed transactions or reserves in such private currencies.
Bangladesh Bank issued its first “warning” against the use of Bitcoin in 2014.
The warning included caution towards transacting in any artificial currency as this could involve unauthorised actions stated in the Foreign Exchange Regulation Act, 1947 and the Money Laundering Prevention Act, 2012.
At the initiative of the Foreign Exchange Policy Department, the central bank had issued a warning on December24, 2016 on their website asking people to refrain from trading in artificial currencies (such as Bitcoin).
At that time, BB said in a statement that “transactions in virtual currency may violate anti-money laundering and anti-terrorism financing laws.”
The central bank is yet to formulate any policy on cryptocurrency.
Earlier throughout the month of June, RAB members arrested a number of people from the capital on charges of trading or possessing cryptocurrency.
Cryptocurrency is a digital currency that can be used to buy goods and services, but uses an online ledger with strong cryptography to secure online transactions.
Much of the interest in these unregulated currencies is to trade for profit, with speculators at times driving prices skyward.
But the addl IG of police, however, said the central bank’s letter might not have been interpreted properly.
“Say you buy Bitcoin here. If you keep it stored, then that might not be a problem. But the minute you use it to make a purchase or cash out, then you do so in an unrecognised channel and this is illegal,” Kamrul said.
He also said that once the cryptocurrency was used for any transaction, it would be a violation of the aforementioned laws, adding that using cryptocurrency would be considered money-laundering.
“If you go to Canada and then cash out your Bitcoin there, then there would be no record of it and it would be considered money-laundering,” he said.
Kamrul also brought up a Bangladesh Bank circular from earlier, pointing out that it had warned people to be careful of cryptocurrency.
The central bank had earlier issued a warning on 24 December, 2016 on their website asking people to refrain from trading in artificial currencies (such as Bitcoin).
At that time, it said in a statement that “transactions in virtual currency may violate anti-money laundering and anti-terrorism financing laws.”
Referring to the latest letter by the central bank, Kamrul said that even in that letter the bank had specified that trading in cryptocurrency could be a crime.
In the central bank letter, it was mentioned that transactions in virtual currencies can, however, be listed as crimes in the second phase of the Foreign Exchange Control Act 1947, Anti-Terrorism Act 2009 and the Prevention of Money Laundering Act 2012.
Another top CID official, under the condition of anonymity, also said that there was no scope for making transactions using cryptocurrency.
Earlier, the Rapid Action Battalion (RAB) arrested several gang over alleged transection of cryptocurrency from Dhaka and Gazipur.
According to the CID source, two cases are being investigating in dealing with cryptocurrency. CID already submitted a charge sheet before the court over case in connection with cryptocurrency.
“As we got a proof of transection during investigation. According to the law, this type of transection is illegal apparently. So CID submitted the charge sheet against the accused,” said Ibrahim Hossen, inspector of CID.
