Turkey introduced new cryptocurrency regulations during the final week of 2024, taking cues from positive regulatory advancements across major global markets, including Europe. The move reflects a growing trend towards tightening oversight in the digital currency space to enhance financial security and prevent illicit activities.
Published in the Official Gazette of the Republic of Turkey on December 25, the new guidelines mandate that all cryptocurrency transactions exceeding 15,000 Turkish Lira (approximately $425) will now require users to provide identifiable information to their service providers. This measure forms part of Turkey’s broader Anti-Money Laundering (AML) efforts aimed at curbing money laundering and terrorism financing through digital currencies.
For transactions under the $425 threshold, crypto service providers are not required to collect this information. However, starting February 25, 2025, all providers will need to gather details on customers using previously unregistered wallet addresses. If providers cannot secure the necessary information, the transaction may be considered “risky,” and they may have the authority to halt these transfers or even sever business relations.
Context and Timing
The introduction of Turkey’s new regulations is strategically timed just before the activation of Europe’s Markets in Crypto-Assets (MiCA) framework, which is set to commence on December 30. Turkey’s approach aligns closely with these impending European regulations, positioning it as a proactive participant in global cryptocurrency regulation.
As of September 2023, Turkey ranks as the fourth-largest crypto market globally, with significant trading volumes surpassing those of established markets like Russia and Canada. The new regulations arrive amid a surge in regulatory interest and a flurry of license applications from crypto firms to the Turkish Capital Markets Board (CMB), indicating a robust interest in formalizing crypto operations within the country.
Following the “Law on Amendments to the Capital Markets Law,” which came into effect on July 2, Turkey has laid a firm foundation for this regulatory update, aiming to provide a structured approach to overseeing crypto asset service providers. Despite the prohibition of cryptocurrency use for payments since 2021, the Turkish public continues to actively engage in buying, holding, and trading digital assets. Additionally, while Turkey currently does not tax crypto profits, a proposed minor transaction tax of 0.03% is being considered to help bolster the national budget.
Turkey’s latest step in cryptocurrency regulation is part of a broader effort to align with international AML standards and protect against financial crimes without stifling innovation. By requiring identification for larger transactions and monitoring new wallet addresses, Turkey aims to create a safer, more transparent trading environment that could attract more institutional investors and ensure compliance with global norms.
As Turkey aligns its regulatory framework with that of Europe and other major economies, it sets a precedent for other nations looking to balance the rapid growth of digital currencies with the need for stringent oversight. These regulations not only enhance the security of crypto transactions within Turkey but also contribute to the broader goal of integrating digital assets into the global financial system in a regulated and secure manner.
Author’s Opinion
Turkey’s updated cryptocurrency regulations represent a significant step towards harmonizing with global financial regulations while safeguarding the burgeoning digital economy. This move underscores the necessity of proactive regulatory frameworks that support technological advancement while preventing financial malfeasance. As Turkey continues to refine its approach, the international community may look to its model as a benchmark for crypto regulatory practices, particularly in balancing innovation with the imperative of security.
Featured image credit: KLMircea via Flickr
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