Turkey is taking significant steps to regulate its cryptocurrency market as it tackles money laundering and terrorism financing through new anti-money laundering (AML) measures. Published in the Official Gazette on December 25, 2024, these new regulations require cryptocurrency users to provide identifying information when conducting transactions exceeding 15,000 Turkish lira (approximately $425). This move, effective February 25, 2025, aligns with global trends as countries strive for more comprehensive oversight of the rapidly growing crypto sector.
The Turkish government has been under increasing pressure to address the potential risks posed by cryptocurrency transactions. The new regulations are seen as necessary by officials, who want to safeguard the country’s financial system against illicit activities. According to various reports, "this measure aims to curb money laundering and terrorist financing through digital assets." The emphasis on accountability reflects Turkey's growing significance as the eleventh-largest crypto market worldwide, with adoption rates surging.
Cryptocurrency service providers operating within Turkey will now bear the responsibility of verifying user identities for transactions above the stipulated threshold. If users transact with unregistered wallet addresses, providers are required to initiate identity checks, ensuring enhanced due diligence. Experts have pointed out the potential consequences of failing to comply: "If providers cannot obtain sufficient customer information, the transaction could be deemed 'risky."
This could result in transaction halts or other necessary actions to protect against possible fraudulent activities.
This regulatory framework draws clear parallels with the European Union’s Markets in Crypto-Assets (MiCA) regulations, which come fully effective on December 30, 2024. It sets high standards for digital asset operations across Europe and encourages similar adaptations globally. Industry analysts have noted, "Turkey’s approach mirrors the European Union’s MiCA framework, which sets precedence for comprehensive crypto regulation across member states." While both initiatives aim to combat financial crimes, Turkey appears to implement more stringent licensing and operational requirements for local crypto firms.
Since the introduction of new regulations, several cryptocurrency service providers have reported increased compliance efforts, with the Turkish Capital Markets Board (CMB) registering 47 license applications since mid-2024. Multiple firms are now preparing to adapt their operational frameworks to align with the new requirements, which encompass not only transaction reporting but also customer identification and risk management. This uptick was fueled by heightened scrutiny over crypto activities worldwide.
Despite the stringent new measures potentially enhancing consumer protection, industry experts caution against negative impacts on innovation. Smaller firms with limited resources may struggle to meet the associated compliance costs, which could lead to consolidation within the market. Established international players, on the other hand, may see the regulations as favorable, viewing Turkey as a ripe opportunity for expansion.
Interestingly, Turkey’s regulations still prohibit the use of cryptocurrencies for direct payments, a restriction enacted since 2021. Although holding, trading, and investing are allowed, the regulatory environment diminishes the daily utility of cryptocurrencies and may suppress broader adoption within the domestic economy.
To address fiscal concerns and strengthen the national budget, Turkish authorities are also mulling over introducing a transaction tax of 0.03% on crypto trading. This proposed tax could bolster national revenues without significantly hampering market growth. With the financial regulators under pressure to improve the country's standing among the Financial Action Task Force (FATF), such explorations show Turkey's intent to align itself closely with international standards of financial integrity.
Looking beyond Turkey, it appears the trend of increased AML enforcement and crypto regulations is becoming more prevalent worldwide. For example, the Central Bank of Russia is also developing surveillance tools to monitor and thwart illegal financial activities, reinforcing the global shift toward stricter cryptocurrency-related oversight. The application of these measures reflects the urgent need for nations to adapt to the changing financial landscapes impacted by digital currencies.
Turkey's regulatory evolution is pivotal not only for its domestic market but also within the broader global cryptocurrency framework. It sets the stage for how other nations may follow suit, integrating similar AML strategies as they grapple with the risks associated with cryptocurrency adoption. While it presents evident challenges for smaller firms, tighter regulations may also pave the way for responsible development within the industry, fostering safer practices against financial crimes.
