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Turkey to Focus New Crypto Rules on Tighter KYC at Exchanges

2 mins
Updated by Geraint Price
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In Brief

  • Turkey plans to launch new crypto laws in 2024 that will likely address crypto taxation and licensing to combat money laundering concerns.
  • The FATF accused Turkey in July of not being able to identify and police virtual asset exchanges, leading to its listing on the grey list.
  • Binance Turkey and Thodex were rebuked for breaches of AML mainly contained in Law No. 5549 on Prevention of Laundering Proceeds of Crime.
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Turkey will roll out new crypto rules that are likely to focus on exchange licensing and taxation. The new rules are expected in 2024 as the government reins in an industry that has boomed amid alarming inflation in recent years.

According to sector officials, Turkey’s crypto rules could include minimum capital and cybersecurity requirements for exchanges, as well as rules about asset custody and proof-of-reserves. A September report by KuCoin, one of the world’s largest exchanges, revealed that crypto adoption increased by 31% in Q2.

Turks Adopt Crypto for Investment

Since October, Finance Minister Mehmet Simsek promised new legislation to remove Turkey from the Financial Action Task Force’s (FATF) “gray list.” FATF had earlier accused Turkey of not being able to regulate and identify virtual asset service providers.

By introducing a new licensing regime, Turkey would be able to tick off the last item on the FATF’s measures to combat money laundering deficiencies. Regulations have undergone consultations for two years and should be ready for parliament soon.

KuCoin Turkey Crypto Report
KuCoin Turkey Crypto Report | Source: KuCoin

The uptake of cryptocurrencies in the last year was in part from people interested in fighting the devaluation of the Turkish lira. KuCoin reported that the currency depreciated over 50% against the US dollar. Turkish citizens appear to favor long-term strategies, investing more than 100,000 Lira in Q2.

Read more: Top Crypto Exchanges and Trading Platforms in Europe

Turkish Crypto Rules Validated by Crime

Regrettably, Turkey’s exchanges have validated some of the FATF’s concerns. Authorities recently took to task at least two firms for enabling criminal activity.

On Sep. 10, they arrested Faruk Fatih Ozer, the founder of Turkish exchange Thodex. Prosecutors found Ozer guilty of money laundering, aggravated fraud, and running a criminal organization.

Binance, which recently hosted its Blockchain Week in Turkey’s capital, Istanbul, was fined $750,000 for poor money laundering controls in 2021. The Financial Crimes Investigation Board (MASAK) audit revealed that Binance violated Law No. 5549 on Prevention of Laundering Proceeds of Crime.

Read more: 7 Best Binance Alternatives in 2023

Law 5549 details the duties of financial institutions, reporting entities, and supervisory bodies to combat money laundering. The Ministry of Finance and Treasury oversees MASAK, with assistance from the Banking Regulation and Supervision Agency (BDDK) and the Capital Markets Board (SPK).

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Top crypto platforms in the US | February 2024



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David Thomas
David Thomas graduated from the University of Kwa-Zulu Natal in Durban, South Africa, with an Honors degree in electronic engineering. He worked as an engineer for eight years, developing software for industrial processes at South African automation specialist Autotronix (Pty) Ltd., mining control systems for AngloGold Ashanti, and consumer products at Inhep Digital Security, a domestic security company wholly owned by Swedish conglomerate Assa Abloy. He has experience writing software in C,...