Law drafted to regulate cryptocurrency markets

ANKARA

The Turkish Parliament will soon start debating a draft law that aims to regulate cryptocurrency markets.

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According to the draft prepared by the lawmakers of the ruling Justice and Development Party (AKP), natural and legal persons who are found to be operating as a crypto asset service provider without obtaining permission will be sentenced to imprisonment from three to five years.

Also, fines of not less than 20,000 Turkish Liras ($1,610) may be imposed on those who make crypto asset purchases, sales and transfers via unauthorized institutions.

“Small individual investors have been entering this market at a time when advertisements are made intensively and people are very interested,” AKP deputy parliamentary group leader Mustafa Elitaş told Demirören News Agency.

“We saw the need for legislation to stop malicious people from harming ordinary people.”

About 5 million people in Turkey have cryptocurrency platform accounts, according to Elitaş’s remarks.

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“I believe that the regulation shouldn’t put blocks on the system, but it should prevent suffering of people,” he said, adding that Turkey could set an example for other nations regarding the usage of cryptocurrencies.

Elitaş and Mahir Ünal, another leader of AKP’s parliamentary group, met with cryptocurrency platform representatives at the meeting hall of the planning and budget commission yesterday.

Ömer İleri, AKP deputy chair in charge of information and communication technologies, and senior officials from the Treasury and Finance Ministry, the Banking Regulation and Supervision Agency (BDDK), the Financial Crimes Investigation Board (MASAK) and the Turkish Central Bank also attended the meeting.

On Dec. 27, MASAK fined Binance, or BN Teknoloji, 8 million Turkish Liras (nearly $634,000) in a first move against a cryptocurrency platform by a watchdog.

Binance Turkey said that it “openly” communicates and cooperates with regulatory and supervisory authorities. Furthermore, Binance Turkey said it strives to “create a sustainable, healthy and safe ecosystem.”

The Central Bank’s ban on using cryptocurrencies for making payments, which was introduced in response to claims that such transactions are too risky, took effect on April 30.

On May 4, MASAK released a guide for crypto asset service providers. Under the guidelines, crypto exchange platforms are entitled to verify the identities of subscribers, to report suspicious transactions and high-volume trading. In the failure of fulfilling those obligations, crypto exchange companies could be fined by MASAK and in case of recurrence, their owners could face prosecution.

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The move came after several cryptocurrency platforms abruptly shut down, leaving thousands of investors in heavy losses. Thodex founder and CEO Faruk Fatih Özer, who fled to Albania, remained the sole suspect on the run in the judicial investigation into the cryptocurrency exchange platform. The 24-hour trading volume on Thodex, which had 400,000 users, was $538 million on its last trading day on April 20, according to Coinmarketcap.

By comparison, daily trading volume on Binance, the largest crypto platform in Turkey, is around $320 million, according to CoinGecko. About 40 cryptocurrency platforms are based in Turkey.

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