Turkey Emerges as the World’s Fourth-Largest Crypto Market? Decoding the New Capital Markets Law Amendment

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Turkey has rapidly ascended to become one of the most dynamic players in the global cryptocurrency landscape. Recent data positions it as the fourth-largest crypto market worldwide—trailing only the United States, India, and the United Kingdom. This surge isn’t driven by tech innovation alone, but by deep-rooted economic challenges that have pushed millions of Turks toward digital assets as a financial lifeline.

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Why Is Turkey Turning to Cryptocurrency?

The driving force behind Turkey’s crypto adoption lies in its prolonged economic instability. With inflation rates soaring and the national currency—the Turkish lira—plummeting in value, citizens are increasingly turning to cryptocurrencies like Bitcoin and Ethereum to preserve wealth.

Between late 2020 and the end of 2023, the Turkish lira lost over 300% of its value against the U.S. dollar. On August 23, 2024, the lira hit an all-time low, briefly breaching 34 per dollar—a stark symbol of ongoing currency depreciation. In just one year, the lira had weakened by approximately 15.2% against the greenback.

Faced with eroding purchasing power, many Turks now view crypto not as speculative tech, but as a practical hedge against inflation and currency collapse.

Despite this widespread adoption, the regulatory environment remained unclear for years—placing the entire sector in a legal gray zone.

A Shift Toward Regulatory Clarity

While the Central Bank of the Republic of Turkey banned the use of cryptocurrencies for payments back in 2021, that move failed to bring comprehensive oversight. However, with mounting global attention on crypto regulation and pressure from international watchdogs, Turkey has taken decisive steps toward formalizing its approach.

The turning point came in June 2024, when Turkey’s parliament passed—and later in July enacted—the Amendment to the Capital Markets Law (No. 7518). This landmark legislation marks a new era of regulation for digital assets in the country.

Background: From FATF Greylist to Regulatory Reform

Turkey had been on the Financial Action Task Force (FATF) greylist since 2021 due to concerns over money laundering risks linked to unregulated financial activities, including cryptocurrency transactions. To exit this list and strengthen its financial credibility, Turkey prioritized establishing a transparent legal framework for digital assets.

The successful removal from the FATF greylist in early 2024 paved the way for the new amendment—a clear signal that Turkey is committed to aligning with international standards while fostering innovation in fintech and blockchain.

The Capital Markets Board (CMB) Takes Charge

Under the revised law, the Capital Markets Board (CMB) is now officially designated as the primary regulatory authority for crypto asset service providers (CASPs). This means the CMB has full power to license, supervise, sanction, and enforce compliance across the sector.

Key regulatory responsibilities include:

Additionally, any entity engaging in banking-related crypto services must also obtain approval from the Banking Regulation and Supervision Agency (BDDK)—ensuring cross-institutional coordination.

Requirements for Crypto Platforms Under the New Law

To operate legally in Turkey, crypto exchanges and service providers must meet strict criteria established under the amendment:

  1. Legal Structure: Platforms must be incorporated as joint-stock companies.
  2. Minimum Capital: A fully paid-in capital of at least 50 million Turkish lira is required.
  3. Ownership Transparency: All shares must be issued in cash and properly registered.
  4. Management Qualifications: Founders and executives must demonstrate financial integrity, professional competence, and a clean legal record.
  5. Defined Scope of Services: Permitted activities include buying, selling, issuing, distributing, clearing, transferring, and custody of crypto assets.

These measures aim to ensure only serious, well-capitalized firms enter the market—filtering out fly-by-night operators and enhancing investor protection.

Transition Period and Market Consolidation

Existing crypto platforms were given a one-month window to submit their applications for licensing. Those failing to apply must cease operations and initiate liquidation proceedings.

Temporary operational permits were granted to 76 exchanges during the transition phase, allowing them time to comply with new standards. However, 8 platforms were already ordered to shut down for failing to meet basic requirements—a sign of regulators’ intent to clean up the market.

All transitional operators must file their full license applications by November 8, 2024, or face mandatory exit.

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Strict Penalties for Non-Compliance

The amendment introduces severe criminal penalties to deter fraud, misappropriation, and unauthorized operations:

These punishments underscore Turkey’s commitment to building a secure and accountable digital asset ecosystem.

Impact and Future Outlook

The Capital Markets Law Amendment represents a pivotal moment for Turkey’s crypto industry. By establishing clear rules and accountability mechanisms, it lays the foundation for long-term growth and institutional trust.

Building Investor Confidence

With standardized licensing, capital requirements, and oversight protocols, investors can now engage with greater confidence. Transparent operations reduce risks of scams and platform failures—critical factors in retaining public trust.

Encouraging Industry Professionalization

The high entry barriers will naturally lead to market consolidation, pushing out undercapitalized or unethical players. In their place, compliant businesses—both domestic and international—are expected to expand operations in Turkey.

Several major global exchanges have already expressed interest in applying for CMB licenses, signaling strong foreign confidence in Turkey’s evolving regulatory environment.

Unlocking Growth Potential

As the world’s fourth-largest crypto market by trading volume, Turkey offers immense potential. With clearer regulations now in place, institutional investors may begin entering the space more aggressively. Combined with rising retail adoption, this could fuel a new wave of innovation in blockchain-based finance.

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Frequently Asked Questions (FAQ)

Q: Is cryptocurrency legal in Turkey?
A: Yes. While crypto cannot be used for payments (per a 2021 central bank ban), owning and trading digital assets is legal. The 2024 Capital Markets Law Amendment further legitimizes crypto by regulating service providers.

Q: Who regulates crypto in Turkey?
A: The Capital Markets Board (CMB) is now the primary regulator for crypto asset service providers. Banking-related activities also require approval from the BDDK.

Q: Can foreigners operate a crypto exchange in Turkey?
A: Yes, provided they incorporate a local joint-stock company, meet capital requirements (50M TRY), pass KYC checks, and obtain CMB licensing.

Q: What happens if a crypto platform doesn’t get licensed?
A: Unlicensed platforms must cease operations and begin liquidation. Continued operation risks criminal charges including imprisonment and heavy fines.

Q: How does this law affect everyday crypto users?
A: Users benefit from safer platforms, better dispute resolution mechanisms, and improved transparency—though they must comply with mandatory KYC procedures.

Q: Is Turkey taxing cryptocurrency?
A: Yes. Crypto gains are subject to income tax under existing rules. The new law supports clearer enforcement of tax obligations through regulated reporting channels.

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