Turkey adds crypto firms to terror financing rules

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Turkey has added cryptocurrency trading platforms to the list of firms covered by anti-money laundering and terrorism financing regulation, it said in a presidential decree published early May 1.

The move came after a ban on using cryptocurrencies for making payments introduced in response to claims that such transactions are too risky took effect in Turkey on April 30.

The presidential decree makes “crypto-asset service providers” responsible for seeing their assets are not used illegally. The decree immediately went into force with its publication in the Official Gazette.

Turkish authorities last month launched fraud investigations into two cryptocurrency exchanges, Thodex and Vebitcoin.

Six suspects linked to the Thodex probe were jailed on April 30, pending trial.

The investigation into Thodex, which handled daily trades of hundreds of millions of dollars, initially led to the detentions of more than 70 people after customers complained of not being able to access their funds.

Interpol issued a detention warrant for the firm’s CEO, Faruk Fatih Özer, on Turkey’s behalf. Turkey has sent two five-member police teams to Albania, where Özer fled after the Thodex website went offline abruptly and trapped cryptocurrency codes of nearly 400,000 customers on April 19.

Özer met with an Albanian couple in Istanbul nearly a month before running away, daily Milliyet reported yesterday.

The total assets allegedly seized by Özer is around $108 million, legal experts told the Turk-ish Interior Ministry after initial examinations.

Vebitcoin Founder İlker Baş, his wife and two employees were also arrested after it halted operations on April 23. Baş has been accused of making XRP altcoin transactions worth over $24 million to his overseas accounts in a month.

Turks have been increasingly attracted by cryptocurrencies as protection against the decline of the Turkish Lira and double-digit inflation. The inflation rate passed 16 percent in Turkey in March, at the time when seven-week crypto trading volumes hit 218 billion Turkish Liras ($27 billion), up from just over 7 billion liras in the same period a year earlier, according to data from U.S. researcher Chainalysis.

Around 40 cryptocurrency exchange platforms are operating in Turkey. The Central Bank, the Treasury and Finance Ministry and financial watchdogs are expected to finalize a regulation package for the cryptocurrency market in the upcoming days, Central Bank Governor Şahap Kavcıoğlu said on April 23.

Hurriyet Daily News

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