Turkey Tightens Crypto Rules to Curb Money Laundering

Turkey is intensifying its regulatory measures on cryptocurrency transactions to combat money laundering from illegal betting and fraud. Finance Minister Mehmet Şimşek announced that the country plans to implement stricter controls, including limits on transfers and waiting periods for crypto withdrawals. These measures are aimed at preventing the laundering of criminal proceeds through cryptocurrency transactions.

According to the latest developments, withdrawals will face a delay of 48 to 72 hours if the so-called travel rule is not applied. The travel rule mandates that providers verify and share details about both the sender and the recipient of a virtual asset transfer. This rule is a critical component of the new regulations, ensuring that all transactions are traceable and transparent.

In addition to administrative sanctions, platforms that do not comply with the new regulations may face various legal and financial penalties, including the denial or cancellation of their licenses. The finance ministry also aims to enforce stricter record-keeping requirements, forcing crypto platforms to document the origin and purpose of funds moving through their systems.

Stablecoin transfers will be capped at $3,000 a day and $50,000 a month to curb fast outflows of illicit funds. However, platforms that meet full travel-rule checks can offer twice those limits, providing an incentive for compliance. Users will be required to provide a transaction note of at least 20 characters for every transfer, and platforms will enforce a 48-hour hold for most withdrawals and a 72-hour wait on a user’s first withdrawal when the travel rule does not apply.

These measures are part of a broader effort by the Treasury and Finance Ministry to enhance oversight of crypto asset service providers. The goal is to curb criminal misuse of cryptocurrencies without hindering legitimate crypto activities. The ministry has assured that there will be sufficient space for lawful crypto asset activities to continue.

The changes are expected to take effect soon, marking a significant step in Turkey's efforts to regulate the cryptocurrency landscape and protect its financial system from illicit activities. The new regulations aim to strike a balance between security and innovation, ensuring that cryptocurrencies can be used responsibly while preventing their misuse for criminal purposes.