Turkey Updates Cryptocurrency Regulation Amid Payments Ban and Collapsing Exchanges

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Turkey’s Banking and Payments Regulation Authority (BAPK) has updated its cryptocurrency regulation amid an ongoing crackdown on local exchanges. The updated version of the BAPK’s circular No. 2017/10, which was published by the Official Gazette on April 2, includes a new section on cryptocurrency. The update follows a decree from Turkish President Recep Tayyip Erdogan and the Cabinet of Ministers that imposed a three-month ban on the use of cryptocurrencies as payment methods, as well as defined initial coin offerings (ICOs) as unauthorized funding mechanisms, on March 29, 2018. The decree states that cryptocurrency units can only be exchanged for Turkish lira.

As cryptocurrencies continue to gain popularity, governments are taking a closer look at how they will be able to regulate users and the exchanges that serve them. (This is a good thing, since it is important that everyone is playing by the same rules.) In a recent turn of events, Turkey has begun working on its new cryptocurrency regulations. (They are one of the first countries to do so.)

The Turkish government has updated the country’s crypto-currency regulations following the ban on crypto-currencies for payments and the collapse of crypto-currency exchanges.

• The new rule, published in the Official Gazette on Saturday, adds cryptocurrency trading platforms to the list of entities subject to anti-money laundering (AML) and counter-terrorist financing (CFT) rules.
• The official state news agency says the latest expansion of the country’s rules for cryptocurrency trading will take effect immediately. Providers of cryptographic services must now comply with existing regulations.
• The government has previously stated its intention to establish a central depository bank to, among other things, eliminate counterparty risk.
• Turkey’s central bank recently banned the use of cryptocurrencies for payments. As a result of the ban, two Turkish cryptocurrency exchanges, Thodex and Vebitcoin, abruptly ceased operations and are currently under investigation for fraud.
• Six people have been taken into custody as part of a fraud investigation into cryptocurrency exchange Thodex, whose CEO Farooq Fatih Ozer fled the country. The Turkish authorities and Interpol are searching for him in four countries.

What do you think of Turkey’s extension of anti-money laundering and anti-terrorism financing rules to cryptocurrency exchanges? Let us know your comments in the section below.

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