Turkey introduces stricter crypto AML regulations

Turkey introduced new cryptocurrency regulatory legislation during the final week of 2024, inspired by positive regulatory developments around the world’s major jurisdictions, such as Europe.

Under the new regulation, users executing transactions above 15,000 Turkish liras ($425) will be required to share their identifying information with the country’s crypto service providers, according to a Dec. 25 document issued by the Official Gazette of the Republic of Turkey.

The new anti-money laundering (AML) regulation aims to prevent the laundering of illicit funds and terrorism financing through cryptocurrency transactions.

However, crypto service providers are not required to collect information for digital asset transfers below the $425 threshold.

Turkey’s new regulatory bill comes during a period of increased interest in cryptocurrency regulation, a week ahead of the implementation of the world’s first comprehensive crypto regulatory framework, Europe’s Markets in Crypto Assets (MiCA) bill — set to go into effect on Dec. 30.

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Will Turkish crypto service providers halt “risky” crypto transactions? 

Turkey’s new regulation is set to go into effect on Feb. 25, 2025.

After the implementation, crypto service providers will also need to collect identifying information from customers using wallet addresses that weren’t previously registered with them.

If the provider is unable to collect the necessary information from the sender, the crypto transfer may be categorized as “risky,” enabling the service provider to consider halting the transaction, according to the new bill, that wrote:

“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.”

As of Sept. 2023, Turkey was the fourth-largest crypto market in the world, with an estimated trading volume of $170 billion, surpassing major markets like Russia and Canada, according to Chainalysis.

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Turkey’s crypto regulations: what you need to know

2024 brought renewed activity among Turkish crypto firms, as the Turkish Capital Markets Board (CMB) received a total of 47 license applications from cryptocurrency companies under the new regulation, leading up to August 2024.

The wave of applications follows the implementation of the “Law on Amendments to the Capital Markets Law,” which came into effect on July 2. This law aims to provide a regulatory framework for crypto asset service providers in Turkey.

Cryptocurrency trading laws in Turkey allow individuals to buy, hold and trade crypto, but using it for payments has been prohibited since 2021.

While Turkey is not taxing crypto profits, the country is considering a minor 0.03% transaction tax to help bolster the national budget.

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