High demand for crypto license in Turkey

Zwei Tauben blicken auf die türkische Hauptstadt Ankara. Bild von Borya via flickr.com. Lizenz: Creative Commons

Meanwhile, 76 crypto companies have registered with the Turkish Capital Markets Board. Since July, registration has been mandatory – and demand is high. The Turkish crypto market is growing rapidly.

For over a month now, the Turkish Capital Markets Board (SPK) has been receiving registrations for crypto services. As of August 9, the SPK has published a list of 47 companies that have registered, now expanding it to 76. Among them are well-known exchanges like Coinbase, KuCoin, Gate.io, Bitfinex, OKX, Binance, and others.

However, the authority emphasizes that being listed does not mean these companies are already licensed. How and if they will distribute licenses is hard to predict. The only regulation crypto companies can currently refer to is the existing financial sector regulation. A specific crypto framework, such as MiCAR in the EU, does not exist. Despite an announcement in January, no draft has been made public so far.

What has come into effect, however, is a law—or more precisely, an „extension of the Capital Market Law“—that has included service providers around cryptocurrencies since July 2. Similar to other financial service providers, the Capital Markets Board (SPK) requires registration for operations—at the latest, one month after the law comes into force. Foreign operators have three months to register or block Turkish users.

The companies find themselves in a tricky situation. They must register urgently, but they don’t know specifically what the authorities demand and what is allowed. In case existing laws on crypto leave gaps, they can only make guesses. And the penalties, if they misjudge, are severe.

Unauthorized operations fall under criminal law and can result in imprisonment. Service providers are liable for unlawful activities and hacks, and their managers can be held personally liable. For safety, the exchange Binance has already started reducing and discontinuing direct advertising to Turkish users through translations into Turkish or specific marketing, scaling back and ceasing said activities. Similar to Germany, non-licensed companies cannot advertise to the local market.

Despite these circumstances, that so many companies are submitting registrations has a good reason. Turkey is a crypto hub in the region. The country is one of the largest markets for cryptocurrencies; depending on the estimate, the Turkish Lira ranks fourth to sixth among fiat currencies in the market. According to a report by analyst Kaiko, 2024 is already a record year, generating more revenue so far than the entire year of 2023. The by far most important cryptocurrency is the Tether stablecoin.

Turkey has evidently developed into a regional crypto hub, and most forecasts see strong growth potential. Therefore, many international exchanges strive for orderly access to this market, even under adverse regulatory conditions.