Turkey is tightening its rules against digital finance by adding cryptocurrency trading platforms to the list of firms covered by anti-money laundering and terrorism financing regulation.
The move came after the central bank of Turkey imposed a ban on using cryptocurrencies for making payments, which was introduced in response to claims that such transactions are too risky, which came into effect in Turkey last day.
The Official Gazette states that the country’s latest expansion of rules governing cryptocurrency transactions would take immediate effect and cover “crypto-asset service providers”, which would be liable to the existing regulations.
Last month, the Turkish authorities launched fraud investigations into two cryptocurrency exchanges, Thodex and Vebitcoin. The probe into one of them led to the jailing of six suspects including the siblings of the chief executive of a firm.
The investigation into Thodex, which handled daily trades of hundreds of millions of dollars, initially led to the arrests of 83 people after customers complained of not being able to access their funds. The International Criminal Police Organization (Interpol) issued a detention warrant for the firm’s CEO on Turkey’s behalf.
Over the past few years, the Turkish people have been increasingly attracted by cryptocurrencies as protection against the decline of the lira (currency of Turkey) and double-digit inflation.
The legislation which came into effect last day prohibits payment service providers from developing business models that use crypto assets directly or indirectly in the provision of payment services and electronic money issuance. Such usages may cause non-recoverable losses for the parties to the transactions and include elements that may undermine the confidence in methods and instruments used in payments.