Turkish Crypto Firms Are Now Subject to Money Laundering and Terror Financing Rules
A lot has been going on currently in Turkey’s crypto landscape. A day after arresting 6 people involved in the Thodex exchange crypto scam, on Saturday, May 1, Turkish regulators added crypto exchanges to the list of crypto firms that are now subject to the country’s money laundering and terror financing laws.
After the billion-dollar exit scams that have rocked the nation, Turkish regulators have tightened their grip on the country’s local crypto firms. In April, the regulators have already introduced a ban on the use of digital currencies.
In the presidential decree published today, the regulator noted that “crypto asset service providers” shall be responsible for seeing that their assets aren’t used for any illegal purpose. On Friday, April 30, Turkey’s central bank also banned the use of cryptocurrency assets for payments. The central bank noted that the anonymity associated with the use of cryptocurrencies brings the risk of “non-recoverable” losses.
The crypto activity in Turkey has spiked significantly recently after the country’s economic turmoil. Its national currency Lira has swiftly lost value in the international market and citizens are moving to crypto to protect their capital and savings.
The rate of people moving to cryptocurrencies has baffled Turkish regulators and authorities. Besides, major crypto exchange scams have also rocked the nation with billions of dollars worth of crypto funds evasion.
Establishing A Central Crypto Custodian Bank
Turkey’s government and its central bank are working on establishing a central custodian for digital assets to eliminate any counterparty risks. This move comes after the sudden collapse of the country’s two biggest exchanges.
Besides, the regulators are also working on introducing operational thresholds for crypto while simultaneously promoting crypto education among businesses. The regulatory process for the same shall be completed in the coming weeks.
An earlier report also suggests that the Turkish central bank is working on its central bank digital currency (CBDC). The central bank will probably roll out the Digital Lira in the next two years.