This week, Turkey has introduced new regulations on cryptocurrencies to strengthen the anti-money laundering (AML) framework. The new regulations require individuals to verify information for medium to large transactions.
These regulations, to be implemented in 02/2025, aim to prevent illegal financial activities in the cryptocurrency market.
Turkey's Anti-Money Laundering Efforts
Under the new regulations, those conducting cryptocurrency transactions exceeding 15,000 Turkish lira, or $425, must share their identifying information with cryptocurrency service providers. The new cryptocurrency regulations reflect the global trend towards tighter oversight of money laundering activities through cryptocurrencies. The country's growing prominence in global cryptocurrency markets is also a factor driving these measures.
The recent legislation covers various aspects of cryptocurrency services. It requires extensive obligations such as licensing requirements, measures to prevent market abuse, and establishing formal written contracts with customers.
This move comes as the Markets in Crypto-Assets (MiCA) regulation is set to be implemented in the European Union. Both initiatives demonstrate the increasing international focus on establishing a robust legal framework for the cryptocurrency industry.
In addition to transaction limits, customers using unregistered wallet addresses with the provider will have to undergo identity verification procedures. If the provider cannot collect sufficient information from the sender, they may classify the transaction as "risky" and stop it if necessary.
"If the messages sent continuously contain incomplete information and this information is not completed when requested, the receiving cryptocurrency asset service provider will consider refusing the transfers from the sending cryptocurrency asset service provider or restricting the transactions performed with that cryptocurrency asset service provider or terminating the business relationship,"
according to the document issued by the Official Gazette of the Republic of Turkey.
These new regulations place significant responsibilities on cryptocurrency exchanges and service providers to implement robust customer verification systems.
The Cryptocurrency Industry is Evolving
The past year has seen a resurgence of Turkish cryptocurrency companies, with 47 companies applying for operating licenses from the Capital Markets Board (CMB) as of August. This increase in applications followed the introduction of the new regulations. Prominent applicants include major exchanges like Bitfinex, Binance TR, OKX TR, and Gate TR.
The renewed interest from cryptocurrency exchanges in obtaining Turkish licenses stems from the implementation of the "Law Amending the Capital Markets Law" on 02/07. This law has established a legal framework for cryptocurrency asset service providers in Turkey. Although Turkey banned the use of cryptocurrencies for payments in 2021, individuals can still buy, hold, and trade cryptocurrency assets.
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