Turkey’s New AML Rules: Crypto Transactions Over $425 Face Stricter Oversight

In late December 2024, Turkey introduced new cryptocurrency regulations, drawing inspiration from global frameworks such as Europe’s Markets in Crypto Assets (MiCA). A document published in the Official Gazette on December 25 outlines key measures that will take effect on February 25, 2025.

Key Regulation Highlights:

• Transactions exceeding 15,000 Turkish liras (around $425) will require users to provide identifying information to crypto service providers.
• For transfers under $425, this requirement will not apply.
• The regulations also mandate service providers to verify details for transactions involving unregistered wallet addresses. Transfers lacking adequate sender information may be flagged as “risky” and potentially halted or lead to termination of business relationships.

A statement from the legislation noted: “In case sufficient information cannot be obtained, the issues of not performing the transfer or limiting the transactions made with the financial institution in question or terminating the business relationship will be considered.”

This development follows Turkey’s recent efforts to provide more regulatory clarity for crypto exchanges and other service providers, and providing licenses to 76 crypto service providers, a move widely praised by the industry as a significant and positive step.

Ethereum Withdrawal Raises Eyebrows

In a related development, a large Ethereum (ETH) withdrawal was reported on December 25 from BTCTurk, a leading Turkish crypto exchange. Whale Alert reported a transfer of 20,000 ETH, worth $69.8 million, to an unknown wallet under the address “0x76eC.”

The address appears to be new, with no prior transaction history, raising questions about whether the wallet belongs to the exchange or a major investor moving funds in response to the new regulations.

Impact on Turkey’s Crypto Landscape

Despite regulatory uncertainty, Turkey’s crypto market remains a key player globally, ranking fourth with an estimated $170 billion in trading volume as of September 2023. The Turkish lira has emerged as the third-largest fiat currency in crypto trading, making up 19% of the market in the first half of 2024.

In addition to the recent regulatory changes, Binance has announced plans to phase out its Turkish language option and halt all marketing activities targeting Turkish users, following the evolving regulatory environment.

While the new regulations may stir some turbulence, experts believe that the market’s dynamics, particularly the recent movements in cryptocurrency prices, will likely absorb the impact. The regulatory push reflects a global trend to formalize the cryptocurrency sector, with Europe’s MiCA framework set to take effect in just a few days.