Turkish legislators have approved a significant crypto regulation bill, introduced by ruling party chairman Abdullah Güler. The bill includes stringent penalties for violations, with fines of up to $182,600 and imprisonment of up to five years.
This legislative move marks a crucial step in Turkey’s efforts to regulate the burgeoning crypto market.
Strict penalties for violations
The newly approved bill imposes strict penalties on those violating its provisions. Crypto exchanges operating without a license from the Capital Markets Board, Turkey’s financial regulatory and supervisory agency, could face prison sentences ranging from three to five years.
Crypto providers must implement and report measures such as seizures and other legal enforcement actions.
They are also required to ensure that customer fund transfers, including deposits and withdrawals, are accessible and traceable by legal authorities.
Approval process and future implications
The bill has been sent to Turkish President Recep Tayyip Erdoğan for final approval. If signed into law, the decision will be published in the Official Gazette by the end of the week, bringing the bill into effect.
The introduction of this legislation follows Turkey’s efforts to comply with international standards set by the Financial Action Task Force (FATF), which included Turkey in its “grey list” for failing to supervise sectors vulnerable to money laundering practices.
Regulatory context and future plans
Turkey has been considering crypto regulation since 2021. In November 2023, Treasury and Finance Minister Mehmet Şimşek announced the imminent introduction of crypto legislation, noting that Turkey had met 39 of the 40 FATF standards and was in the final stage of compliance.
Earlier this year, Şimşek emphasized that the new regulations aim to mitigate risks associated with crypto trading and protect retail investors.
Key aspects of these regulations include legal definitions of terms such as “crypto assets,” “crypto wallets,” and “crypto asset service providers.”
Although not included in the bill, there are discussions about imposing a transaction tax of 0.04% on investors’ crypto trades. The specifics of how and when this tax will be regulated remain unclear.
The approval of this crypto regulation bill represents a pivotal moment in Turkey’s approach to managing the digital asset market.
By enforcing strict penalties and requiring licensing, the Turkish government aims to create a more secure and regulated environment for crypto trading.
As the country moves towards full compliance with FATF standards, these regulations are expected to play a crucial role in protecting investors and mitigating risks in the crypto market.
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