In a move aimed at preventing money laundering and terrorism financing, Turkey has introduced new regulations for cryptocurrency transactions. The changes, which come into effect on February 25, 2025, are part of a broader effort to strengthen the country’s anti-money laundering (AML) regime.
Inspiration from Global Regulatory Developments
The Turkish government’s decision to introduce these new regulations is closely tied to the growing trend of crypto regulatory developments worldwide. In Europe, for instance, the Markets in Crypto-Assets (MiCA) bill is set to go into effect on December 30. This comprehensive framework aims to provide a unified approach to regulating cryptocurrencies across the continent.
Key Provisions of the New Regulations
Under the new regime, users executing transactions exceeding 15,000 Turkish lira ($425) will be required to share their identifying information with crypto service providers. This threshold is designed to balance the need for AML compliance with the need to minimize administrative burdens on smaller-scale traders.
Information Sharing and Wallet Address Registration
Crypto service providers are not obligated to collect identifying information for digital asset transfers below the $425 threshold. However, they will be required to register users’ wallet addresses that were not previously registered with them. This move is intended to enhance transparency and prevent illicit activities.
Consequences of Failing to Obtain Identifying Information
In cases where crypto service providers are unable to collect sufficient information from senders, the transfer may be categorized as ‘risky.’ As a result, the provider may choose to halt the transaction. According to the new bill:
In case sufficient information cannot be obtained, the issues of not performing the transfer or limiting the transactions made with the financial institution in question or terminating the business relationship will be considered.
Turkey’s Growing Crypto Market
As of September 2023, Turkey was ranked as the fourth-largest crypto market globally, with an estimated trading volume of $170 billion. This significant growth has led to increased attention from regulatory bodies, driving the need for clearer guidelines and frameworks.
Regulatory Developments in Turkey
In recent years, Turkey has made significant strides in establishing a clear regulatory framework for cryptocurrencies. The Turkish Capital Markets Board (CMB) received 47 license applications from crypto companies under the new regulation, leading up to August. This wave of applications followed the implementation of the ‘Law on Amendments to the Capital Markets Law,’ which came into effect on July 2.
Crypto Trading Laws in Turkey
While individuals are allowed to buy, hold, and trade cryptocurrencies, using them for payments has been prohibited since 2021. Furthermore, Turkey does not tax crypto profits; however, there is a proposed 0.03% transaction tax aimed at bolstering the national budget.
Timeline of Regulatory Developments in Turkey
- July 2: The ‘Law on Amendments to the Capital Markets Law’ comes into effect.
- August: The Turkish Capital Markets Board (CMB) receives 47 license applications from crypto companies under the new regulation.
- December 25, 2024: The Official Gazette of the Republic of Turkey issues a document outlining the new AML regulations for cryptocurrency transactions.
- February 25, 2025: The new regulations come into effect.
Conclusion
Turkey’s introduction of new cryptocurrency regulations is part of a broader effort to strengthen its anti-money laundering regime. As the global crypto market continues to grow and mature, regulatory bodies worldwide are working to establish clear guidelines and frameworks for this emerging sector.
