Turkey Implements Stricter Crypto AML Rules

Turkey Introduces Stricter Crypto Regulations to Combat Financial Crime

In the final week of 2024, Turkey unveiled new cryptocurrency regulations, aligning with positive regulatory trends in major jurisdictions such as Europe. These changes, published in the Official Gazette of the Republic of Turkey on December 25, aim to strengthen anti-money laundering (AML) measures in the crypto sector.

Under the updated framework, individuals conducting cryptocurrency transactions exceeding 15,000 Turkish liras (approximately $425) must provide their identifying information to crypto service providers. This rule is intended to prevent the use of digital assets for laundering illicit funds or financing terrorism. Notably, transactions below the $425 threshold are exempt from these requirements.

This regulatory move coincides with a broader global focus on crypto governance. The announcement comes just days before Europe’s landmark Markets in Crypto-Assets (MiCA) bill—the first comprehensive regulatory framework for cryptocurrencies—is set to take effect on December 30, 2024.

Stricter Measures for “Risky” Crypto Transactions

Turkey’s new regulations, scheduled to be implemented on February 25, 2025, introduce further obligations for crypto service providers. In addition to verifying transactions above the $425 threshold, providers must also collect identifying information for wallet addresses not previously registered with their platforms.

If a sender fails to provide the necessary information, the transaction may be classified as “risky.” The regulations grant providers the authority to halt such transfers or even terminate business relationships with the associated parties. According to the bill:

“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.”

This cautious approach underscores Turkey’s commitment to mitigating financial crime in the digital asset space.

Turkey’s Expanding Crypto Market

Turkey’s growing role in the global crypto economy adds context to these developments. As of September 2023, Turkey ranked as the fourth-largest cryptocurrency market worldwide, with an estimated trading volume of $170 billion—surpassing countries like Russia and Canada, according to Chainalysis.

In 2024, Turkey’s crypto firms witnessed renewed activity, with the Turkish Capital Markets Board (CMB) receiving 47 license applications from crypto companies under the amended regulatory framework. These applications followed the introduction of the “Law on Amendments to the Capital Markets Law,” effective from July 2, which established clear guidelines for crypto asset service providers.

Legal and Tax Implications

While cryptocurrency trading remains legal in Turkey, using digital assets for payments has been prohibited since 2021. Additionally, the government is considering a nominal 0.03% transaction tax to strengthen its national budget. However, crypto profits currently remain untaxed, maintaining a favorable environment for traders and investors.

Turkey’s updated cryptocurrency regulations represent a significant step in aligning with international standards while addressing the unique challenges of its rapidly expanding crypto market. By enforcing stricter AML measures and introducing safeguards for “risky” transactions, Turkey aims to ensure a safer, more transparent environment for digital asset activities.

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