Changes in AML legislation require users to show identification when the transaction amount is more than 15,000 Turkish liras, or approximately $425. This has been hailed as a development for higher standards of accountability and transparency across the burgeoning asset class.
The Republic of Turkey published the announcement on December 25 in its Official Gazette.
Transactions below $425 are exempt from identity disclosure requirements. However, the $425 threshold highlights Turkey’s focus on monitoring larger transactions. Such transactions are more likely to be associated with financial crimes. The regulations also impose new responsibilities on crypto service providers.
Service providers must collect identifying information from customers using wallet addresses not previously registered with them. If providers fail to obtain the required details, they may classify the transaction as “risky.” In such cases, they might halt the transfer to reduce potential risks.
Turkey’s Growing Role in Global Crypto Regulation and Market Leadership
Turkey’s decision to tighten regulations coincides with growing global interest in cryptocurrency oversight. Just days after the announcement, Europe’s MiCA framework is set to take effect on December 30, 2024. MiCA represents the first comprehensive cryptocurrency policy framework in Europe. Other countries are also taking steps to improve their policies on virtual currencies.
Turkey is a prominent player in the global cryptocurrency market. As of September 2023, it ranked as the fourth-largest crypto market worldwide, with an estimated trading volume of $170 billion. This figure places Turkey ahead of markets like Russia and Canada, according to Chainalysis data. Given this prominence, robust regulations are crucial to ensure the market operates securely and ethically.
The new regulations follow a notable year for crypto activity in Turkey. In 2024 alone, the Turkish Capital Markets Board (CMB) received 47 license applications from crypto firms. The “Law on Amendments to the Capital Markets Law,” effective July 2, 2024, drove this surge. This law established a comprehensive regulatory framework for crypto asset service providers, encouraging firms to adapt to the evolving legal environment.
Turkish residents can buy, hold, and trade digital assets. However, authorities banned the use of cryptocurrencies for payments in 2021. This ban reflects concerns about volatility and the potential misuse of cryptocurrencies in commercial transactions. Despite these restrictions, Turkey has not imposed taxes on crypto gains. However, discussions are underway about introducing a 0.03% transaction tax to support the national budget.
Turkey’s updated regulations demonstrate its commitment to fostering a secure and transparent crypto ecosystem. These measures address potential risks while aligning with international standards. By balancing innovation and security, Turkey aims to sustain its growing crypto market in the long term.
