Could banning virtual assets be a breach of the doctrine of legitimate expectation?
| DOI | https://doi.org/10.1108/JMLC-07-2021-0077 |
| Published date | 04 October 2021 |
| Date | 04 October 2021 |
| Pages | 719-729 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
| Author | Md. Zahurul Haq,Kazi Fahmida Farzana,Moniruzzaman Md |
Could banning virtual assets be a
breach of the doctrine of
legitimate expectation?
Md. Zahurul Haq
International Law Research Unit, School of Law, Universiti Utara Malaysia,
Sintok, Kedah, Malaysia
Kazi Fahmida Farzana
Department of International Relations, University of Sharjah, Sharjah,
United Arab Emirates, and
Moniruzzaman Md
Department of Political Science, International Islamic University Malaysia,
Kuala Lumpur, Malaysia
Abstract
Purpose –This paper aims to examinethe validity of a state’s prohibition on virtual assets in the context of
its global commitmentto battle against money laundering.
Design/methodology/approach –This was empirical legal research exploring how a general lack of
expertise to apply a risk-based approach in anti-money laundering strategies might have implications for
invokingthe Financial Action Task Force (FATF) exclusionprovisions in virtual asset regulation.
Findings –Invoking the exclusionprovisions for banning virtual assets without meetingthe prerequisites
may put the financial systemat risk and make a jurisdiction’slegal obligations appear breached.
Research limitations/implications –Anti-moneylaundering(AML) policymakerswill take precautions
andavoid misuse of theliberties they enjoyunder FATF exclusionclauses/provisions.
Practical implications –The resultsof this study will help ensure more informeddecision-making on the
legal statusand regulation of virtual assets.
Originality/value –The study helps ascertain the limits of privileges accorded to states under FATF
exclusionprovisions in applying global standards against money laundering.
Keywords Virtual assets, Money laundering, Exclusion provisions, Cryptocurrency,
Legitimate expectation, Bangladesh
Paper type Research paper
1. Introduction
Despite its wide acceptance as a digital representation of value (Hanafiand Rahman, 2019,
pp. 271–278), cryptocurrency’s legal status remains doubtful in many jurisdictions. Even
more perplexing is the regulators’implicitban, which does not often explain what elements
of illegality are involved in owning and transferring this value. One of such jurisdictions is
Bangladesh, where the legal status of cryptocurrency is unresolved even under growing
threats of its abuse. On the one hand, Bangladesh Bank –the central bank of Bangladesh–
has imposed an implicit ban on cryptocurrencies because of their alleged criminal nature
(Bangladesh Bank,2014, 2017). Their position has not changed since then. On the other
hand, the Information and Communication Technology Division (ICTD) of the government
Doctrine of
legitimate
expectation
719
Journalof Money Laundering
Control
Vol.25 No. 4, 2022
pp. 719-729
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-07-2021-0077
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