Cryptocurrencies are being regulated worldwide, and Turkey has taken a new step in this regard. The regulation discussed in 2021 reached the parliament much later than expected. After being promised in February, the details were finally announced today in the Turkish Grand National Assembly. However, the provisions have also caused some confusion.
Cryptocurrency Law in Turkey
Initially, these 19 articles were primarily prepared to remove Turkey from the FATF grey list by June. Treasury Minister Mehmet Şimşek consistently stated that the final step to exit the grey list was cryptocurrency regulation. Significant steps were taken in combating money laundering and licensing exchanges.
Let’s address the topic in detail.
What is the Cryptocurrency Tax Rate?
No, this draft does not mention any taxation for the end-user. A 2% fee will be collected from the exchanges’ earnings and transferred to SPK and TÜBİTAK. The tax issue for the end-user will be clarified in the second regulation (the timing of which is unknown). It is expected that a low rate will be applied to trading profits. The rates are, of course, not yet determined.
Are Global Exchanges Being Banned?
Global exchanges will no longer be allowed to advertise in Turkey. Exchanges that do not have a Turkish version, meaning those that have not established a company in our country, will be prevented from serving Turkish citizens. Thus, global exchanges will not be able to use their global versions in Turkey, similar to what the US demanded from Binance for years. However, this will be a long process, and some exchanges may not strive much to separate Turkish customers. For instance, Binance paid over $4 billion in fines last year for allowing US citizens.
However, Ömer İleri’s recent statement indicates that exchanges like Binance, which have established a company in Turkey, can also serve Turkish customers on their global versions.
Decentralized Wallets and General Comments
Restrictions on decentralized wallets can only be possible if local exchanges receive restriction instructions. So, how will the use of global exchanges be prevented? As mentioned earlier, the desired goal can be achieved through continuous monitoring and reporting by local exchanges. However, does SPK or local exchanges have the equipped personnel to manage such comprehensive oversight? Rules must be enforced, and the public damages resulting from non-enforcement could lead to much bigger problems. Within the entire draft (asset segregation, embezzlement, etc.), institutions face a tough task.
Returning to the main topic, if decentralized exchanges cannot be restricted, Turkish users can continue to use these exchanges under the current system (if global exchanges do not block Turkish users to avoid sanctions). They can use DeFi platforms and participate in airdrops. Indeed, Ömer İleri from AKP also stated that there is no such restriction. TÜBİTAK has veto power for listings. Additionally, details such as asset segregation and embezzlement are included in the draft.
