Turkey’s Minister of Treasury and Finance, Mehmet Şimşek, has disclosed key details of the impending cryptocurrency regulations to be implemented in the country. These regulations aim to define critical crypto concepts, require trading platforms to obtain licenses and align with international standards set by the Financial Action Task Force (FATF).
In an effort to reduce risks associated with crypto trading for ordinary investors, Turkey seeks to address concerns and remove itself from FATF’s “grey list.” This article explores the key highlights of Turkey’s forthcoming crypto regulations.
Turkey’s regulatory framework will provide legal definitions for essential crypto-related terms. Among the terms to be defined are “crypto assets,” “crypto wallets,” “crypto asset service providers,” “crypto asset custody service,” and “crypto asset buying and selling platforms.”
For instance, crypto assets are “intangible assets that can be created and stored electronically using distributed ledger technology or a similar technology, distributed over digital networks, and capable of expressing value or rights.”
Licensing crypto platforms
Under the new guidelines, cryptocurrency trading platforms must obtain licenses from Turkey’s Capital Markets Board (CMB). This move aims to ensure these platforms operate within a regulated and supervised framework, providing investors with higher security and confidence in their dealings. Licensing also helps combat illicit activities such as money laundering and fraud.
Turkey’s regulatory efforts are geared towards complying with international standards set by the FATF. By doing so, the government aims to improve its standing within the global financial community and eliminate any potential risks associated with being on the FATF’s “grey list.”
The international practices and standards focus underscores Turkey’s commitment to fostering a secure and compliant crypto market.
Protection for ordinary investors
Minister Şimşek emphasized the government’s commitment to reducing the risks associated with crypto trading for ordinary investors. By implementing these regulations, Turkey intends to create a safer environment for crypto investors, similar to practices followed in other countries. This move aligns with global efforts to protect retail investors from potential financial harm in crypto.
It’s important to note that while these regulations cover various aspects of the crypto market, they do not encompass a specific tax regime for virtual assets. Taxation remains a separate consideration, and Turkish authorities may address it separately. This approach allows for flexibility in adapting to the evolving landscape of cryptocurrency taxation.
Turkey’s growing crypto market
Over the past year, Turkey has witnessed a significant surge in crypto transactions. According to data from blockchain analytics firm Chainalysis, between July 2022 and June 2023, Turkey ranked fourth globally in raw crypto transaction volumes, with approximately $170 billion in activity.
This places Turkey just behind countries like the United States, India, and the United Kingdom, highlighting Turkish citizens’ growing interest in cryptocurrencies.
The forthcoming crypto regulations in Turkey are expected to instill confidence among investors and businesses in the crypto space. By providing clear definitions, requiring licensing for trading platforms, and aligning with FATF standards, the Turkish government aims to foster an environment where crypto enthusiasts and businesses can operate securely and transparently.