Turkey

Okay, here is the comprehensive report on the current status of retail cryptocurrency trading in Turkey, prepared as per your instructions.

**Report: Retail Cryptocurrency Trading Status in Turkey**
**Date:** April 12, 2025

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**Topic: Retail_Trading_Status**

**Description:** Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

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**1. Current Status:** `Allowed-Regulated`

**2. Detailed Narrative Explanation:**

Individual citizens and residents in Turkey are currently permitted to buy, sell, and hold cryptocurrencies. There is no outright ban on owning or trading these assets for retail investors. However, the environment is regulated, primarily concerning the use of crypto assets for payments and the obligations of service providers regarding Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF).

*   **Historical Context & Payment Ban:** Turkey has seen significant interest and adoption of cryptocurrencies among its population, partly driven by high inflation and currency volatility. Recognizing the risks and the need for oversight, the Turkish authorities began taking regulatory steps. A key development occurred in April 2021 when the Central Bank of the Republic of Turkey (TCMB) issued the "Regulation on the Disuse of Crypto Assets in Payments." This regulation explicitly prohibited:
    *   The direct or indirect use of crypto assets for payments for goods and services.
    *   Payment service providers and electronic money institutions from developing business models involving the direct or indirect use of crypto assets in providing payment services and issuing electronic money, and from providing any services related to such business models.
    *   Crucially, this regulation *did not* ban the trading (buying/selling) or holding of cryptocurrencies by individuals through exchanges or peer-to-peer. It solely focused on their use as a means of payment.

*   **AML/CTF Regulation:** Following the payment ban, in May 2021, Turkey's Financial Crimes Investigation Board (MASAK), operating under the Ministry of Treasury and Finance, issued guidelines extending existing AML/CTF obligations to Crypto Asset Service Providers (CASPs). This was a significant step in regulating the operational aspect of crypto platforms. Key requirements imposed on CASPs include:
    *   **Customer Due Diligence (CDD) / Know Your Customer (KYC):** Verifying the identity of their customers.
    *   **Suspicious Transaction Reporting (STR):** Reporting potentially illicit activities to MASAK.
    *   **Record Keeping:** Maintaining records of transactions and customer information.
    *   **Providing Information:** Supplying information and documents requested by authorities.
    *   These measures align Turkey with international standards, particularly those set by the Financial Action Task Force (FATF), which had placed Turkey on its "grey list" partly due to deficiencies in crypto asset regulation (though Turkey has since been working to address these).

*   **Ongoing Legislative Developments:** Recognizing the need for a more comprehensive framework beyond AML/CTF, the Turkish government has been actively working on new legislation specifically targeting crypto assets and service providers. Draft laws have been discussed for some time, aiming to establish a licensing regime for crypto exchanges and platforms, likely under the supervision of the Capital Markets Board of Turkey (CMB/SPK). These proposed regulations aim to enhance investor protection, prevent market abuse, ensure financial stability, and further align with FATF recommendations. While specific details of the final law and its implementation timeline may evolve, the direction is towards formalizing the crypto market under regulatory supervision. Recent reports suggest significant progress on this legislation, potentially introducing licensing requirements, capital adequacy rules, and operational standards for CASPs.

*   **Summary of Status:** Therefore, while individuals can freely trade and hold crypto, the platforms facilitating these activities are subject to specific AML/CTF regulations enforced by MASAK. The use of crypto for payments remains banned by the TCMB. The broader regulatory landscape is evolving, with comprehensive legislation expected or recently enacted to bring CASPs under the purview of the Capital Markets Board, solidifying the "Allowed-Regulated" status.

**3. Relevant Excerpts/Summaries:**

*   **On the Payment Ban (TCMB Regulation, April 2021):**
    *   Summary: The Central Bank of the Republic of Turkey (TCMB) regulation published in the Official Gazette on April 16, 2021, explicitly bans the use of crypto-assets, directly or indirectly, in payments. It also prohibits payment and electronic money institutions from mediating platforms offering trading, custody, transfer, or issuance services for crypto assets or mediating fund transfers from these platforms. The regulation cited potential non-recoverable losses, illicit use, and volatility as reasons. *(Source: TCMB Regulation No. 31456)*

*   **On AML/CTF Obligations (MASAK Guideline, May 2021):**
    *   Summary: Turkey's Financial Crimes Investigation Board (MASAK) added "crypto asset service providers" to the list of entities obligated under AML/CTF laws. The "Guideline on Prevention of Laundering Proceeds of Crime and Financing of Terrorism for Crypto Asset Service Providers" requires these providers to conduct KYC/customer due diligence, report suspicious transactions, and comply with other AML/CTF preventive measures. *(Source: MASAK Guideline No. 2021/1)*

*   **On Ongoing Broader Regulation Efforts (General Reports):**
    *   Summary: Reports from legal firms and news outlets consistently indicate that Turkey has been preparing comprehensive legislation for crypto assets. The proposed framework is expected to grant the Capital Markets Board (CMB) authority to license and supervise crypto asset platforms, setting operational standards, capital requirements, and investor protection rules, largely driven by the need to comply with FATF standards and provide market stability. *(Source: Various legal analyses and financial news reports)*

**4. Source URLs:**

*   **TCMB Regulation on Payment Ban (Official Gazette - Turkish):**
    *   [https://www.resmigazete.gov.tr/eskiler/2021/04/20210416-4.htm](https://www.resmigazete.gov.tr/eskiler/2021/04/20210416-4.htm)
    *   *(Note: Official English translations may be limited; secondary sources often provide reliable summaries)*

*   **MASAK Main Page (Turkish - Navigate for Guidelines/Announcements):**
    *   [https://masak.hmb.gov.tr/](https://masak.hmb.gov.tr/)
    *   *(Specific guideline link might require navigation or searching the site's legislation/announcements section)*

*   **Example Secondary Source Analysis (Legal Firm - Often provides English summaries):**
    *   *(Note: Search for recent analyses from reputable Turkish or international law firms specializing in Fintech/Blockchain, e.g., "Turkey crypto regulation update [Law Firm Name]")* Example (Illustrative - check for latest updates): [https://www.lexology.com/](https://www.lexology.com/) (Search for "Turkey crypto regulation") or specific firm websites.

*   **FATF Information on Turkey (Check for latest reports):**
    *   [https://www.fatf-gafi.org/en/countries/detail/Turkey.html](https://www.fatf-gafi.org/en/countries/detail/Turkey.html)

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This report reflects the status based on publicly available information up to the current date. The regulatory landscape, particularly regarding the comprehensive legislation under the CMB, is dynamic and subject to change.