Crypto Exchanges Flood Turkey with License Applications amid New Regulations

International cryptocurrency exchanges are flocking to Turkey in response to the country’s recent clarification of its regulatory stance on crypto. The Turkish Capital Markets Board (CMB), Turkey’s financial regulatory authority, has reported a surge in applications, with 47 crypto exchanges, including industry giants like Binance, Bitfinex, and OKX, expressing their intention to operate in the country.

This wave of interest follows the implementation of the “Law on Amendments to the Capital Markets Law,” which was approved by Turkish legislators and came into effect on July 2, 2024. The new law mandates that all crypto exchanges wishing to legally operate in Turkey must obtain a license from the CMB. Non-compliance could result in severe penalties, including fines up to $182,600 and prison sentences ranging from three to five years.

The CMB has emphasized that being included in the “List of Those in Operation” does not equate to official authorization. Exchanges must still undergo further scrutiny and secure formal approval from the board, particularly after the enactment of secondary legislation. The list will be updated as companies address any deficiencies or as the CMB completes its investigations.

Turkey’s proactive approach to cryptocurrency regulation is driven by its significant role in the global crypto economy. According to blockchain forensic firm Chainalysis, Turkey ranked fourth globally in raw crypto transaction volume in 2022, with $170 billion in transactions, making it a key crypto hub in the Middle East.

Despite this influx of interest, some major U.S.-based exchanges like Coinbase and Gemini have not yet applied for licenses. Meanwhile, three companies have declared liquidation, and the CMB continues to review applications from those that provided incomplete or inadequate information.

Turkey’s regulatory framework, though not fully comprehensive, includes critical measures such as a 2021 regulation by the Central Bank of the Republic of Turkey, which prohibits the use of cryptocurrencies like Bitcoin for payments. Additionally, the Financial Crimes Investigation Board enforces Anti-Money Laundering (AML) regulations, requiring exchanges to collect Know Your Customer (KYC) data to prevent illicit activities.

The surge in license applications highlights Turkey’s growing prominence in the cryptocurrency sector and its commitment to establishing a regulated and secure crypto market, despite the ongoing development of comprehensive crypto legislation. As Turkey continues to solidify its regulatory framework, the country is poised to become an increasingly attractive destination for global crypto exchanges.