600,000 Bangladeshis Use Binance Despite Crypto Ban: The Underground Reality

Imagine a country where using cryptocurrency is technically illegal, yet hundreds of thousands of people do it every single day. In Bangladesh, this isn't a hypothetical scenario-it’s the daily reality for over 600,000 citizens. Despite one of the strictest government bans in the world, these individuals are actively trading on platforms like Binance, a leading global cryptocurrency exchange. This massive underground movement highlights a stark contradiction: while the state maintains a hardline stance against digital assets, the demand among its population remains insatiable.

This paradox places Bangladesh in a unique position globally. As of 2025 and moving into 2026, the nation ranks alongside countries like China, Egypt, and Nepal as part of an exclusive club of roughly ten nations maintaining total cryptocurrency prohibitions. Yet, unlike some jurisdictions where enforcement is absolute, Bangladesh sees a thriving shadow economy operating openly in plain sight. Understanding how this works requires looking beyond the official laws to see the practical mechanisms that keep this digital ecosystem alive.

The Legal Framework: A Ban Without Explicit Laws

One of the most confusing aspects of the situation is that there is no specific law explicitly banning cryptocurrency ownership. Instead, the prohibition relies on existing financial regulations. The Bangladesh Bank, the central monetary authority of the country, first issued warnings against Bitcoin usage back in 2014. These warnings were reinforced in 2016, citing potential violations of two major pieces of legislation: the Foreign Exchange Regulation Act of 1947 and the Money Laundering Prevention Act of 2012.

The logic used by regulators is straightforward but broad. Since cryptocurrencies are not recognized as legal tender or official currency by the Bangladesh Bank, any transaction involving them is viewed with suspicion. The central bank argues that virtual currency transactions violate anti-money laundering (AML) and counter-terrorism financing laws. Consequently, holding, trading, or facilitating crypto transactions is considered illegal under current interpretations of these older acts.

This creates a regulatory grey zone. While the intent is clear-stop crypto usage-the lack of a dedicated cryptocurrency law means enforcement is reactive rather than proactive. Multiple bodies are involved in this oversight, including the Ministry of Finance for policy influence and the Financial Intelligence Unit (FIU) for monitoring money laundering risks. However, this fragmented approach often leads to inconsistent enforcement, allowing users to slip through the cracks.

How the Underground Market Operates

If buying crypto is so risky, how do 600,000+ users actually get their hands on digital assets? The answer lies in sophisticated circumvention methods that have evolved over years. The most direct method involves using credit or debit cards. When users attempt to buy cryptocurrency on platforms like Binance using local cards, the transactions are processed in US dollars. Banks can track these fund movements, making this method high-risk and less common for regular traders.

A far more prevalent method is the use of local agents. These intermediaries facilitate Bitcoin and Tether transactions in exchange for Bangladeshi Taka. They charge small commissions but offer a crucial advantage: they allow users to trade without directly linking their bank accounts to international crypto exchanges. This peer-to-peer (P2P) model creates a buffer between the user and the blockchain, significantly reducing detection risks.

Furthermore, accessibility remains surprisingly high. Applications for major exchanges like Binance and KuCoin are still available on the Google Play Store within Bangladesh. There has been no widespread technical blocking of these apps at the ISP level, meaning anyone with a smartphone can download them instantly. This suggests either a significant gap in enforcement capabilities or a deliberate choice by authorities to focus on banking channels rather than app availability.

The Paradox of Blockchain Strategy

Perhaps the most striking contradiction in Bangladesh’s approach is its simultaneous embrace of blockchain technology while rejecting cryptocurrencies. In 2020, the government released a National Blockchain Strategy, recognizing blockchain as essential for digital transformation. This document highlighted the potential of distributed ledger technology for improving governance, supply chain management, and financial inclusion.

However, the strategy carefully distinguishes between the underlying technology and the speculative assets built upon it. The government views blockchain as a tool for efficiency and transparency, while viewing cryptocurrencies as vectors for instability and crime. This distinction is difficult to maintain in practice, as many blockchain applications rely on tokens or coins for operation. For developers and tech enthusiasts, this creates a confusing environment where innovation is encouraged in theory but stifled in practice if it touches on tokenomics.

Dr. B M Mainul Hossain, a professor at Dhaka University and director of its Institute of Information Technology, has publicly criticized this disjointed approach. He argues that "banning is not a solution" and emphasizes that "sitting back and doing nothing is not the answer." His perspective represents a growing chorus of academic voices calling for transparent regulation rather than blanket prohibition. He advocates for frameworks that monitor usage without requiring identity concealment, suggesting that the government should explore balanced approaches considering both risks and benefits.

Risks for Users and Businesses

For the average citizen participating in this underground market, the risks are tangible. While arrests for simple crypto ownership are rare, the threat of asset freezing looms large. If a bank identifies suspicious transactions linked to crypto purchases, they can freeze accounts pending investigation. This has happened to numerous individuals who attempted to move larger sums through traditional banking channels.

For businesses, the impact is even more severe. Cross-border payments, particularly with neighboring countries like India, become complicated and costly. Companies forced to rely on traditional banking channels face slower processing times and higher fees. Moreover, engaging in international trade without access to stable digital currencies introduces major compliance risks. Any attempt to settle foreign exchange transactions using cryptocurrency constitutes a direct violation of the Foreign Exchange Regulation Act, potentially leading to heavy fines or legal action.

Taxation adds another layer of complexity. Although no specific crypto tax regime exists, the National Board of Revenue treats cryptocurrency transactions under the general provisions of the Income Tax Ordinance of 1984. This means profits from trading are subject to income tax, but reporting them openly could be seen as admitting to illegal activity. Most users simply do not report these gains, further fueling concerns about tax evasion among regulators.

Global Context and Future Outlook

Bangladesh’s strict stance contrasts sharply with regional neighbors. Countries like India, Russia, and Indonesia have adopted severe restrictions but allow crypto as an investment asset, prohibiting its use for payments. Nigeria experiences similar dynamics, with popular usage growing despite banking channel blocks. Meanwhile, nations like El Salvador, Switzerland, and the United Arab Emirates pursue full integration with traditional financial systems through clear regulatory frameworks.

As we move through 2026, pressure is mounting on Bangladesh to reconsider its position. The persistent growth of the underground market demonstrates that prohibition strategies may be ineffective in preventing adoption. Instead, they drive activities into less regulated channels, increasing risks for consumers and reducing visibility for authorities. Academic experts continue to advocate for engagement through open discussion, regulation, and education.

The government’s recognition of blockchain’s importance suggests potential openings for more nuanced approaches. Future policy directions will likely depend on enforcement effectiveness, international regulatory trends, and domestic pressure from the substantial crypto community already operating despite existing restrictions. Whether this leads to legalization or tighter crackdowns remains uncertain, but one thing is clear: the 600,000 users on Binance are not going away anytime soon.