Turkey’s crypto clampdown underwhelms as investors claim ‘business as usual’

Moves by the Turkish government to impose stricter rules on cryptocurrencies — including a ban on using crypto as a means of payment and compulsory reporting of transactions above a certain size — have left retail investors and small-scale crypto traders largely unfazed.

“It seems [as though] the legislation didn’t have any effect on cryptocurrency at all,” Turkish crypto investor Arda Güney told Forkast.News. 

Güney’s sentiments are echoed by others active in cryptocurrency markets, including Özgür Güner, CEO of BtcTurk, one of the country’s biggest digital asset exchanges.

The most recent sign of Ankara’s desire to rein in the crypto sector is a new requirement that Turkey-based crypto exchanges must now report all cryptocurrency transactions involving 10,000 Turkish lira (US$1,200) or more to the country’s Financial Crimes Investigation Board, known as Masak.

The controversial ban went into effect on April 30, also forbidding fiat transfers to centralized cryptocurrency platforms through fintech systems. 

The regulation was announced by the treasury and finance minister, Lütfi Elvan, in a CNN Türk live broadcast, only two weeks after Thodex, one of Turkey’s biggest crypto exchanges, was involved in a US$2 billion fraud.

According to Elvan, Masak has prepared strict guidelines for cryptocurrency exchanges, with special consideration given to monitoring transactions. 

“Masak has full audit authority over crypto exchanges,” Elvan said. “Crypto trading platforms are now obliged to share information on their active users with Masak. They are liable for any suspicious activities on their platforms. They are also responsible for notifying Masak about any transactions worth over 10,000 Turkish lira within 10 days of trades.”

Only a month earlier, Turkey’s central bank had announced a ban on the use of cryptocurrencies as payment for goods and services as part of the country’s efforts to regulate digital assets. The government has been monitoring surging interest in cryptocurrencies, fearing that criminals may use them for illegal activities.

In a press release dated April 16, the central bank said crypto assets entailed significant risks, as “they may be used in illegal actions due to their anonymous structures,” and adding: “They are neither subject to any regulation and supervision mechanisms nor a central regulatory authority.”

Lira’s loss is crypto’s gain
Turks’ demand for cryptocurrencies has grown since the country’s annualized inflation rate climbed above 16% in March for the first time since 2019, with investors seeking to hedge against the sliding value of the Turkish lira and gain from Bitcoin’s bull run.

The tightening of controls in the crypto space may have been expected, and the latest rule unwelcome, but market participants, even some of the larger ones, appear to have shrugged off concerns that the sector is under threat.

Güner of BtcTurk said during an appearance on Coindesk’s “First Mover” broadcast: “The regulation is for e-money institutions and payment gateways. I don’t expect crypto regulations to go further and limit investment purposes as well.” 

Crypto investor Güney told Forkast.News: “I know the environment in Turkey very well. First, Turkey did not ban cryptocurrency in general, they only banned paying via cryptocurrency. People can still legitimately buy and hold crypto assets, but they cannot make a payment via them. 

“People are still enthusiastic about buying and trading crypto assets. It’s crazy, I can’t believe how everyone is rushing to cryptos, from the average ‘Mehmet’ to educated people,” he added. “So, in short, people are still enthusiastic and the interest is growing.”

Source : forkast.news