Turkey strengthens Cryptocurrency Anti-Money Laundering regulations, transactions over 425 US dollars require user identity verification

Turkey is preparing to strengthen its Anti-Money Laundering (AML) framework for Cryptocurrency transactions, requiring user identification for transactions exceeding 15,000 Turkish Lira (approximately $425). These new regulations were published in the official Turkish Gazette on December 25, 2024, and will take effect on February 25, 2025, aiming to align the country's Crypto Assets policy with global standards, including the EU's Markets in Crypto-Assets (MiCA) regulation on encryption assets.

Under the new regulations, Cryptocurrency service providers will be required to verify the identity of users conducting transactions above a specified amount. Additionally, service providers must ensure that transactions from unregistered wallet addresses are legitimate. This new regulation will allow Cryptocurrency service providers in the country to halt 'risky' Cryptocurrency transactions when user information is insufficient.

The Turkish government has taken these measures to combat money laundering and terrorist financing activities in the rapidly growing cryptocurrency industry. The regulations also introduce stricter compliance measures, including the requirement for cryptocurrency service providers to obtain a license from the Capital Markets Board (CMB) of Turkey.

As Turkey continues to develop its regulatory framework for Cryptocurrency, these new anti-money laundering measures represent an important step towards creating a safer and more transparent environment for digital asset trading in the country.

Blockchain data analysis company Chainalysis pointed out in a report in September 2023 that Turkey's total cryptocurrency transaction volume reached 170 billion US dollars from June 2022 to July 2023, second only to the United States, India, and the United Kingdom, and has emerged as a leading global cryptocurrency market.

Turkey's approach is consistent with the EU's MiCA framework, which sets high standards for digital asset operations across Europe and encourages similar adjustments worldwide. These new regulations in Turkey have prompted Turkish cryptocurrency companies to strengthen compliance efforts. Since the implementation of the Capital Markets Law Amendment on July 2, the Capital Markets Board of Turkey (CMB) has received 77 license applications from cryptocurrency companies by December 2024.

Despite the strict new measures aimed at enhancing consumer protection, industry experts express concerns about the negative impact that innovation may bring. Small companies with limited resources may struggle to bear the associated compliance costs, which could lead to market consolidation. On the other hand, international large enterprises may view these regulations as advantageous and see Turkey as an opportunity for expansion.

The evolution of regulation in Turkey is critical to its domestic market and the broader global Cryptocurrency framework. It has laid the groundwork for other countries to potentially emulate, integrating similar anti-money laundering strategies when dealing with the risks associated with Cryptocurrency adoption. While this poses significant challenges for small companies, stricter regulations may also pave the way for responsible development within the industry, promoting safer practices against financial crime.

Related content: The new encryption regulations in Turkey have been well received. Can Taiwan learn from them to attract international brands to land?

The original article, 'Turkey strengthens Cryptocurrency anti-money laundering regulations, transactions over $425 require user identity verification', was first published in 'Blocklike'.