Bitcoin Foundation Bangladesh temporarily ceases operations following bank warning
Last week, Bangladesh’s central bank issued a warning against dealing in Bitcoin, stating that anyone caught using the digital currency could be jailed under the nation’s stringent anti-money laundering laws.
AFP reports that the Bangladesh Bank said it issued the warning after local media reports of Bitcoin transactions through a number of 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,” said the Bangladesh Bank in a statement last Monday.
Bank officials told AFP that individuals found guilty in Bangladesh of using Bitcoin could receive a jail sentence of up to 12 years.
The statement provoked a response from Bitcoin Foundation, which has an affiliate in Bangladesh. In a Bitcoin Foundation blog post published Friday, Executive Director Jon Matonis wrote, “Until more information is obtained on the current situation, Bitcoin Foundation Bangladesh has temporarily suspended educational and membership efforts.”
Matonis said the central bank’s statement “spooked the Bitcoin community, particularly in Bangladesh, and those with loved ones in the country. Now, we all know how this goes – one Bitcoin story with a misleading headline is released and its message ripples across the news wire. As a result, Bitcoin’s promising social and economic benefits for the people of Bangladesh have been put on pause for the time being.”
Matonis said in the blog post that since the release of the bank’s statement, Bitcoin Foundation’s global team has been collaborating with its local team to get more information and, as of Friday, have determined that the statement is a standard cautionary one and not an outright prohibition. That means the bank is warning consumers of the risks involved with using Bitcoin and reminding them that the virtual currency is not government issued or sanctioned.
Matonis notes the statement makes it clear that, when in the use of digital currencies, should anyone violate any terms of Bangladesh’s Foreign Currency Control Act, 1947 or the Money Laundering Control Act, 2012, they will be subjected to punishments as prescribed. But what is not clear, wrote Matonis, is whether there are any other official statements or conditions under which transacting or educating people on Bitcoin could be deemed a punishable offense.
Matonis wrote that his foundation has been a proponent of advising against placing your life savings in Bitcoin, and of fostering the Bitcoin technology as a force of good. “In the two years we have been engaged in educating and advising policymakers and regulators,” he said, “we have found that sensible governments seek to maximize Bitcoin’s potential for social and economic benefits while mitigating its risks.”
Matonis added in the post:
“The sensible approach for Bangladesh is to understand and examine Bitcoin and its promise for improving lives of its citizens, creating jobs and economic opportunity. In an increasingly globalized economy, adopting Bitcoin will open doors that only technological advances can bring. Should Bangladesh choose, after careful study of the technology and its transformative potential, to close its doors, then Bitcoin will continue to thrive in countries open to innovation.”
Image courtesy of Bitcoin Foundation