Turkey is escalating its endeavors to regulate the cryptocurrency domain in alignment with the MiCA framework of the European Union. The draft legislation, recently sanctioned by the Parliamentary Commission and now under scrutiny by the General Assembly of the Parliament, marks a pivotal moment in bolstering regulations on digital assets and addressing money laundering, essential for Turkey's progression out of the FATF grey list. The definitions and regulations delineated in this legislation aspire to introduce fresh benchmarks for crypto-related operations across the country.

Inclusionary Facets of the Draft

This draft law integrates specific definitions concerning cryptocurrencies within the Capital Markets Law, elucidating terms like wallet and address. Its principal objectives revolve around supervising platforms offering crypto asset services and custody. By overseeing the digital issuance of crypto assets off the Central Securities Depository (MKK) grid, Turkey aims to streamline governance of these activities.

Progression of the Draft Legislation

The imminent approval of the draft legislation by the General Assembly before the June FATF meeting is on-track. The enactment seeks to crack down on unlawful practices and cultivate a structured framework for the cryptocurrency landscape. Turkish officials are optimistic about wrapping up the entire process within a few business days.

Recent affirmations from Ömer İleri assure that foreign exchanges will not encounter a blanket ban, and tax-related matters will be addressed distinctly. A specialized assessment will determine the tax rates applicable to investor transactions and income.

Crucial Details for Investors

• Foreign exchange platforms will persist but under vigilant surveillance.
• Tax guidelines specific to cryptocurrency transactions will be detailed in a stand-alone study.
• Global exchanges may confront restrictions on futures transactions with Turkish investors.
• Adaptations of global exchanges in local domains could become obligatory, reminiscent of the 2021 regulations.

Several global cryptocurrency exchanges have pre-emptively established local branches in the anticipation of these forthcoming regulations. Nevertheless, the enforcement of mandatory localization, mirroring the 2021 protocols, remains uncertain. Furthermore, future transactions might encounter heightened restrictions for Turkish investors, potentially attracting penalties for non-compliance.