Turkey’s New Crypto Law Ignites Global Debate: Imprisonment for Non-compliance with KYC Requirements
The global cryptocurrency scene is experiencing rapid growth, with Bitcoin reaching its all-time high in December and surpassing the historic milestone of $100k this year. As a result, the interest in crypto assets is expected to increase. While several countries are adopting a more lenient approach towards cryptocurrencies, Turkey has recently passed a law that requires cryptocurrency users to provide identification data for transactions exceeding $425. Interestingly, individuals in Turkey who fail to comply with Know Your Customer (KYC) requirements may face imprisonment of up to 25 years for money laundering. This demonstrates Turkey’s commitment to user safety and indicates their cautious approach towards crypto usage. However, it remains to be seen whether this move will have any unintended consequences and how it will impact investors.
In 2023, Turkey introduced its first legal framework for cryptocurrencies, creating a more secure and structured environment for investors. This initiative addresses longstanding concerns regarding trust and reliability in the market. Currently, Turkey ranks as the fourth-largest crypto market globally, with a trading volume of $170 billion, surpassing countries like Russia and Canada (as of September 2023).
Salim Karaman, CEO of BtcTurk, emphasized that these regulations have attracted investor attention and are promoting digitalization through tokenization projects.
The approval of Bitcoin spot Exchange Traded Funds (ETFs) in the United States has had a ripple effect worldwide, inspiring more Turkish investors to explore the crypto markets. Kutluhan Akcin, Turkey’s country manager at Bybit, pointed out that the country’s Capital Markets Board (SPK) has established a list of approved crypto platforms. This provides investors with a much-needed layer of security, ensuring that they can trade on reliable and legal platforms. With the uncertainties surrounding the legal framework diminishing, both individual and institutional investors are showing greater confidence in Turkey’s crypto market.
Despite the strict regulations, Turkey has witnessed a growth in trading activity. OKX Turkey, for instance, reported an impressive $2.5 billion in transactions since its launch in February 2024. CEO Mehmet Camir described 2024 as the “year of adoption” for crypto, with increasing interest from institutional players such as pension funds and corporate treasuries. These developments highlight Turkey’s position as the largest crypto market in the Middle East and North Africa.
Experts believe that Turkey’s regulatory framework is a game-changer for the crypto industry. By establishing an organized and trustworthy environment, the country is paving the way for greater institutional investments and a wider user base. With its strategic location and growing market activity, Turkey is poised to become a key player in the global crypto space, fostering optimism for 2025 and beyond.
The regulation also extends to unregistered wallet addresses, mandating exchanges to collect complete information before processing transactions. Transactions that lack sufficient information may be deemed “risky” and temporarily suspended.
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