BB warns against cryptocurrencies


Bangladesh Bank has issued a cautionary notification against settling online transactions in virtual currencies like Bitcoin.

There is no legal framework on cryptocurrencies like Bitcoin, Ethereum, Ripple and Litecoin in any country including Bangladesh, so all concerned should avoid transactions through the online-based currencies, the central bank stated in the notice on its website.

Clients will face financial and legal risks while settling transactions through the tools as virtual currency is not legally recognised by the central bank or payment system authority of any country.

Besides, transactions through the online-based currencies are not authorised in line with the prevailing Foreign Currency Regulations Act-1947, Anti-Terrorism Act-2009 and the Money Laundering Prevention Act-2012.

Such transaction may violate the existing money laundering prevention act and anti-terror financing regulations, the central bank said.

Meanwhile, Bitcoin, the most well-known cryptocurrency, fell more than 11 percent after South Korea yesterday said it would ban anonymous trading of virtual currencies and crack down on money laundering activities using them, according to an AFP report.

The announcement came as the hyper-wired South emerged as a hotbed for cryptocurrency trading, accounting for some 20 percent of global Bitcoin transactions — about 10 times the country’s share of the world economy.

The new rules announced by Seoul include a ban on opening anonymous cryptocurrency accounts and new legislation to allow regulators to close virtual currency exchanges if necessary.

“Officials share the view that virtual currency trading is overheating irrationally…and we can no longer overlook this abnormal speculative situation,” the government said in a statement.

All anonymous accounts currently in use will be closed next month, it added.

The announcement came two weeks after Seoul banned its financial firms from dealing in virtual currencies, most notably Bitcoin, as their prices soared, sparking concerns of a bubble largely fuelled by retail speculators. Also, the Israel Securities Authority said it is moving to ban trading in cryptocurrency-based companies on the Tel Aviv market until transactions involving digital coins are legally regulated.

The head of the authority, Shmuel Hauser, said on Monday that the stockmarket regulator would discuss the proposal at a meeting next week.

“So long there is no regulatory framework, we will make it that companies whose trade is primarily based on digital coins won’t be able to trade at the (Tel Aviv) stock market,” he said.

In addition, “the activity of a company that already exists and most of its activity is through Bitcoin will be suspended,” he said.