CRYPTOCURRENCY, a digital or virtual asset secured by cryptography and typically built on decentralised blockchain technology, is as yet illegal in Bangladesh although it is not universally illegal. And it has become a headache as money is syphoned off in cryptocurrency through platforms dealing with the system. Cryptocurrency remains traceless, outside the purview of the central bank, the law enforcement agencies and taxation. Cryptocurrency platforms are, in fact, used as digital hundi, an informal system of transferring money across borders that bypasses regulated banking channels. The Criminal Investigation Department says, as New Age reported on May 23, that $136 million in cryptocurrency was syphoned off through the online fraudulent investment platform Metaverse Foreign Exchange in 2023 and the amount is much higher than the $101 million that was initially stolen from the Bangladesh Bank reserve kept with the Federal Reserve Bank of New York in 2016. In the 2016 incident, the stolen amount finally came down as the transfer of $20 million could be stopped in Sri Lanka and Manila, in November that year, returned $15 million that could be recovered from a junket operator there. In the cryptocurrency system, any recovery is difficult as both the sender and the receiver remain traceless.
The money in cryptocurrency flows from the sender to the receiver in foreign exchange through layered decentralised systems over cryptocurrency platforms. The Criminal Investigation Department towards the end of March could recover only $3.6 million, or Tk 441.4 million, of the total amount of $136 million laundered in cryptocurrency in 2023. Experts list inadequate logistics and lack of technical know-how as stumbling blocks to chain analysis of blockchain platforms. Another impediment is that a large number of victims, who have lost money after investing in cryptocurrency, do not file complaints with the law enforcers as the central bank considers cryptocurrency illegal. The US-based Crypto Council for Innovation in January said that Bangladesh, with 4.3 million people owning cryptocurrency accounts, ranked 13th on the 2026 Global Crypto Adoption Index. Experts believe that the government should work out a policy to contain cross-border money transfer in cryptocurrency. A software engineering teacher of a private university says that the government needs to have the Mutual Legal Assistance Treaty, to seek services in diplomatic channels, software and forensic facilities to arrest criminals dealing with cryptocurrency on the dark web. Criminal Investigation Department officials say that they had to take help from US intelligence agencies to trace digital footprints as they have no logistics for blockchain analysis.
The government needs to step up surveillance on the transfer of money in cryptocurrency, but it first needs to arm the investigation agencies with the technology and collaboration instruments that it needs to enter into with foreign entities.
