Turkey Blocks 46 Crypto Websites Including PancakeSwap

Turkey’s Capital Markets Board, the country’s financial regulator, announced it had blocked access to websites “providing unauthorized crypto asset services.”

In a Thursday notice, the Capital Markets Board said it had taken legal action against 46 websites, including decentralized exchange PancakeSwap and Cryptoradar, in a crackdown on crypto services offered to residents of Turkey. The regulator cited the country’s Capital Markets Law as its authority to block the websites.

PancakeSwap reported more than $325 billion in trading volume for June, making it one of the most significant decentralized exchanges alongside Uniswap and Curve. It’s unclear how Turkish authorities determined the platform had been offering “unauthorized” services.

Regulators and authorities in certain countries have acted to block websites offering crypto services, often saying the companies had not been registered or were facilitating illicit transactions. The governments of Kazakhstan, Venezuela, the Philippines, Russia and others have previously cracked down on similar websites.

Turkey’s Capital Markets Board has had full regulatory control over crypto asset service providers offering services to residents since March, when it created a framework establishing standards and requirements. Since February, crypto users in Turkey have been required to provide identifying information when executing transactions of roughly $425 or more.

Turkish residents are permitted to purchase, hold and trade cryptocurrencies, but the country banned using digital assets for payments in 2021. A local law firm was scheduled to challenge the ban in a May hearing.

Turkish authorities have taken a significant step in regulating the cryptocurrency landscape by blocking access to PancakeSwap, a decentralized exchange (DEX) operating on the Binance Smart Chain. This action is part of a broader crackdown on unauthorized crypto services, as the country's Capital Markets Board (SPK) enforces its regulations under Capital Markets Law 6362. The SPK has identified PancakeSwap as one of 46 websites offering crypto services without the necessary licenses, leading to the imposition of sanctions and the blocking of these platforms for Turkish residents.

The move by Turkish authorities underscores the government's commitment to ensuring that all crypto-related activities comply with local regulations. By targeting PancakeSwap, the SPK aims to protect investors from potential risks associated with unregulated crypto services. This action is particularly notable as it marks the first instance of sanctions being imposed on a decentralized exchange in Turkey. The SPK's decision highlights the challenges faced by decentralized platforms in navigating regulatory frameworks, as they often operate in a legal gray area due to their decentralized nature.

The blocking of PancakeSwap is likely to have implications for the broader crypto community in Turkey. Users of the platform will now face difficulties in accessing their funds and conducting transactions, which could lead to a shift towards more regulated exchanges or other financial services. Additionally, this crackdown may prompt other decentralized exchanges to reassess their operations in Turkey and consider obtaining the necessary licenses to continue providing services in the region.

The regulatory actions taken by Turkish authorities reflect a growing trend among governments worldwide to impose stricter controls on the crypto industry. As the popularity of cryptocurrencies continues to rise, regulators are increasingly focused on ensuring that these digital assets are used in a manner that protects consumers and maintains financial stability. The blocking of PancakeSwap serves as a reminder that decentralized exchanges are not immune to regulatory scrutiny and must adhere to local laws and regulations to operate legally.