Legal Regulations in Turkey Cryptocurrency Exchange

Legal Regulations in Turkey Cryptocurrency Exchange. Cryptocurrencies are leading a fundamental transformation in the global financial system in recent years. The rapid spread of Bitcoin and the thousands of crypto assets that have followed are constituting a new challenge for traditional legal and financial regulations. In Turkey as well, the interest in crypto assets is increasing with each passing day. However, the ambiguity of the legal status of these digital assets is bringing serious questions for investors and financial institutions. In this article, the current situation of cryptocurrency law in Turkey, the regulations made by the Central Bank and MASAK, taxation subjects, and the legal steps that are expected in the future are being examined in detail.

1. The Legal Status of Cryptocurrency: Is It Money or an Asset?

In Turkish law, cryptocurrencies are not being accepted as money. With the regulation published by the Central Bank of the Republic of Turkey (TCMB) in 2021, crypto assets have been defined as “cannot be used directly or indirectly in payments.” This definition is clearly stating that cryptocurrencies cannot be used as a means of exchange or a payment method. However, it is being stated that crypto assets are being accepted as a “non-material asset” or a “virtual asset” and are under legal protection.

2. The Prohibition of the Use of Cryptocurrency in Payments

The regulation published by the TCMB in 2021 has completely prohibited the use of crypto assets in payments. With this regulation, the use of cryptocurrencies directly or indirectly in the purchase of a product or service is being prevented. At the same time, money being transferred through crypto asset platforms has also been prevented. The main purpose of this prohibition has been explained as the protection of the stability of currencies and the protection of users against possible damages.

3. MASAK Regulations: The Fight Against Money Laundering

The Financial Crimes Investigation Board (MASAK) is being accepted as one of the most important institutions that are auditing the cryptocurrency market in Turkey. With the regulation published in 2021, important obligations have been brought to crypto asset service providers (cryptocurrency exchanges). These obligations are:

• Know Your Customer (KYC) Obligation: Cryptocurrency exchanges are required to verify the identities of their users and to store this information.
• Suspicious Transaction Reporting: Cryptocurrency exchanges are required to report transactions that are arousing suspicion of money laundering or terrorism financing to MASAK.
• Risk Management: Exchanges are required to establish risk management systems and to take the necessary precautions to reduce these risks.

These regulations are aiming to make the cryptocurrency market in Turkey more transparent and reliable.

4. The Taxation of Cryptocurrency: The Current Situation

The subject of the taxation of cryptocurrencies in Turkey is being accepted as a subject that has been debated for a long time. An official legal regulation has not yet been made, but some explanations have been given by the Tax Administration. According to the information that has been obtained:

• Income Tax: The gains obtained from cryptocurrency trading are being thought to be subject to income tax as “value increase gains.” This is meaning that investors who are making a profit must pay tax on the gains they have obtained.
• VAT: Because cryptocurrencies are not being accepted as a good or a service, Value-Added Tax (VAT) is not being taken from the trading of these assets.
• Expectation of New Regulation: It is being expected that a clearer and more comprehensive legal regulation will be made for the taxation of crypto assets in the future.

5. Crimes Committed with Cryptocurrency and the Legal Framework

Cryptocurrencies can be used as a tool in crimes such as cyber fraud and money laundering. In the Turkish Penal Code (TCK), a direct regulation for crimes committed with cryptocurrency is not being found, but existing criminal law rules are being applied to these types of crimes.

• Fraud: The deceiving of people with the use of fake platforms or promises in cryptocurrency trading is being evaluated as the crime of fraud.
• Money Laundering: The laundering of money obtained from unlawful ways through cryptocurrency is being prosecuted within the scope of the crime of money laundering.

6. The Future and Expected Legal Regulations

The passing of a comprehensive law for the cryptocurrency market in Turkey is being expected. It is being known that this law is aiming to ensure the protection of investors, to regulate the licensing of cryptocurrency exchanges, and to clarify audit mechanisms. With these new legal regulations, the legal status of cryptocurrency will be made clearer.

The Importance of Legal Counseling

The cryptocurrency market is a complex area that is containing legal uncertainties and rapid changes. For this reason, legal counseling being taken from a lawyer is of vital importance for investors to protect their rights, to fulfill their legal obligations, and to avoid possible legal risks.

Legal Regulations in Turkey Cryptocurrency Exchange- Cryptocurrency law in Turkey is being accepted as an area that has not yet matured completely. Although the regulations made by the Central Bank and MASAK are bringing a certain framework to the market, a comprehensive legal regulation is still being needed. The fact that cryptocurrencies cannot be used as a means of payment, the uncertainties about taxation, and the legal gaps related to their use in crimes are being seen as the most important legal challenges in this area. With the regulations that will be made in the future, the creation of a more reliable and transparent environment in Turkey’s cryptocurrency market is being aimed for.