Stricter Regulations Aim to Combat Illicit Crypto ActivityTurkey is set to implement stringent anti-money laundering (AML) regulations targeting cryptocurrency transactions beginning February 25, 2025. The new framework mandates that users conducting transactions exceeding 15,000 Turkish lira (approximately $425) must disclose identifying information to crypto service providers, according to an announcement published in the Official Gazette of the Republic of Turkey on December 25. This move aligns Turkey with global efforts to regulate the burgeoning digital asset sector, drawing inspiration from Europe's forthcoming Markets in Crypto-Assets (MiCA) framework.The new policy enables crypto service providers to classify certain transfers as “risky” if sufficient user information is unavailable, empowering them to halt transactions or restrict business relationships under the law. Transfers involving unregistered wallet addresses will also require identification verification, adding an additional layer of scrutiny to combat the misuse of cryptocurrencies in money laundering and terrorism financing. Notably, transactions below the $425 threshold are exempt from these reporting requirements.Turkey's heightened focus on cryptocurrency regulation follows a year of robust activity in its digital asset market. In 2024, the Turkish Capital Markets Board (CMB) received 47 license applications from crypto firms, signaling increased interest in compliance ahead of the new rules. This uptick coincides with the implementation of the “Law on Amendments to the Capital Markets Law” on July 2, which aimed to establish a comprehensive regulatory framework for crypto service providers.The backdrop to this regulatory tightening is Turkey's position as one of the world’s largest crypto markets. As of September 2023, the country ranked fourth globally, boasting a trading volume of $170 billion, surpassing significant markets like Russia and Canada, according to Chainalysis. While Turkish residents can buy, hold, and trade cryptocurrencies, using digital assets for payments has been banned since 2021. The government is now exploring a potential 0.03% transaction tax on crypto trades to bolster public finances, further reflecting its evolving approach to the sector.Turkey’s regulations come amid broader global efforts to enhance oversight of the crypto industry. The timing of the announcement, just days ahead of MiCA’s enforcement on December 30, underscores Turkey’s ambition to align itself with leading jurisdictions in cryptocurrency governance. These developments signal a transformative period for the nation’s crypto landscape as it seeks to balance innovation with security and compliance.This article has been refined and enhanced by ChatGPT.