Turkey Strengthens Crypto Regulations to Combat Illicit Activities
As the global crypto landscape continues to evolve, Turkey is taking bold steps to ensure the integrity of its digital currency market. Scheduled to take effect on February 25, 2025, the country’s new anti-money laundering (AML) regulations will introduce stricter measures to prevent the use of cryptocurrencies for illicit activities, including money laundering and terrorism financing.
Threshold for Disclosure
Under the new regulations, users engaging in transactions exceeding 15,000 Turkish liras (approximately $425) will be required to provide identifying information to crypto service providers. This threshold aims to strike a balance between facilitating legitimate transactions and preventing anonymous dealings that could facilitate illegal activities. Transactions below this threshold will not necessitate such disclosures, ensuring that everyday users are not unduly burdened.
Enhanced User Information Requirements
Crypto service providers will also be required to gather user information for wallet addresses that have not been previously registered. This measure is designed to increase transparency and accountability in the crypto market. If providers cannot obtain the necessary data from a transaction sender, they may classify the transaction as “risky” and consider halting it. In cases where sufficient information is not provided, providers may limit transactions or terminate business relationships.
Rise in License Applications
The introduction of these regulations follows a surge in applications from crypto firms seeking licenses. The Turkish Capital Markets Board (CMB) has reported 47 applications since the implementation of the “Law on Amendments to the Capital Markets Law” on July 2, 2024. This influx of interest underscores Turkey’s position as the fourth-largest crypto market globally, with a trading volume of approximately $170 billion as of September 2023.
Global Context
Turkey’s regulatory framework aligns with broader global trends, particularly Europe’s forthcoming Markets in Crypto-Assets (MiCA) bill, which will take effect on December 30, 2024. As the crypto industry continues to mature, governments around the world are recognizing the need for stricter regulations to prevent illicit activities and protect investors.
Taxation Considerations
In addition to these regulatory changes, the Turkish government is contemplating a minimal transaction tax of 0.03% on crypto profits to support the national budget. While no such tax is currently in place, this proposal highlights the ongoing efforts to establish a comprehensive framework for the crypto market in Turkey.
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