Bangladesh Bank warns of jail for Bitcoin traders

Bangladesh’s central bank on Monday warned against dealing in Bitcoin, saying anybody caught using the virtual currency could be jailed under the country’s strict anti-money laundering laws.

bbThe Bangladesh Bank, which regulates the impoverished country’s banking industry, said it issued the order after reports in local media of Bitcoin transactions through various online exchange platforms.

“Bitcoin is not a legal tender of any country. Any transaction through Bitcoin or any other crypto currency is a punishable offence,” the bank said in a statement.

Bank officials told AFP separately that anyone found guilty in Bangladesh of using Bitcoin could be sentenced to up to 12 years in jail.

Launched in 2009, Bitcoin is a virtual payment system launched in 2009 that can be used to pay for goods from a computer or mobile device.

Backers say virtual currencies allow for an efficient and anonymous way to store and transfer funds online.

But virtual currencies, most famously Bitcoin, have come under increasing scrutiny by financial regulators as their popularity has grown.

Several countries have warned users of the risks associated with Bitcoin, such as their susceptibility to fraud because of the difficulty of tracing transactions.

Last Friday, Europe’s top banking regulator called on the region’s banks not to deal in virtual currencies until rules are developed to stop them being abused.