- In April, two of the country’s exchanges collapsed.
- On April 30, Turkey implemented a ban on cryptocurrency payments.
- On May 1, AML/CTF requirements were imposed on crypto trading platforms.
In the last few weeks, Bitcoin and cryptocurrencies have been a heated topic in Turkey as two of the country’s exchange platforms collapsed in April: Thodex and Vebitcoin. This led the country to adopt a series of measures aimed at establishing regulations on cryptocurrency and cryptocurrency trading.
What happened to Thodex and Vebitcoin exchange?
On April 18, Thodex exchange ceased its trading operations and went offline arguing it was dealing with external investments. Around 400,000 users were unable to access or withdraw their funds which resulted in growing concerns from the community as some of them even mentioned an alleged rug pull. The exchange denied the accusation on its website and Twitter account.
Thodex’s CEO was reportedly missing at that time which led users to file a legal complaint accusing the exchange of stealing millions of dollars on April 22. The day after that, Interpol issued a red notice on Thodex’s CEO as he reportedly fled to Albania1, which informed worldwide law enforcement agencies about internationally wanted fugitives. In addition, Turkey also arrested several people linked to Thodex for its investigation on the case.
In the same manner, another Turkish exchange, Vebitcoin, also announced2 on April 23, that it was ceasing operations due to financial reasons. Turkish authorities blocked the exchange’s domestic bank accounts while detaining 4 people as part of the investigation against the exchange.
Turkey is strengthening its crypto regulations
These two events led Turkey to tighten its regulations on cryptocurrencies and crypto trading.
The first move came in Mid May when the country’s Central announced a ban on crypto payments. According to the notice issued by Turkey’s Central Bank3, payments made with cryptocurrencies are prohibited. Crypto trading however remains possible. This ban became effective on April 30, 2021.
On May 1st, just a day after the effect of the crypto payment ban, a presidential decree was published in The Official Gazette4 including crypto asset service providers in the list of obliged entities in Turkish AML/CTF regulation5. The decree was effective immediately upon release. This means that Turkish-based virtual asset service providers will now have to meet AML/CTF standards just like other financial institutions already on the list of concerned entities.
Turkish VASPs will now have to meet new requirements such as:
- “Customer identification;
- Suspicious transaction reporting;
- Training, internal control, control and risk management systems and other measures;
- Periodically reporting;
- Providing information and documents;
- Retaining and submitting; and
- Electronic notification”
It is thus necessary for Turkish VASPs to implement processes and use proper tools to ensure that their AML/CFT policies will meet the new requirements established by the decree.
How can Scorechain’s solution can help VASPs comply with AML/CTF regulations?
Scorechain provides you with useful tools to strengthen your AML/CTF processes and helps you comply with AML regulations. Scorechain products can also be customized to suit your internal processes.
- Risk scoring for assessing the risk associated with addresses, transactions, and entities.
- Risk indicators to help you assess what risks are associated with the addresses/transactions.
- Alert system to monitor wallets’ activities in real-time.
- KYA (Know-your-address) and KYT (Know-your-transaction) reports to file suspicious activity reports (SAR) / suspicious activity report (STR).
More tools are available to help your compliance team with AML/CTF requirements such as the Case Manager or the Entity Directory. If you’d like to learn more about the product and how it can help meet regulatory requirements, feel free to ask for a demo at firstname.lastname@example.org.
Scorechain is a Risk-AML software provider for cryptocurrencies and digital assets. As a leader in crypto compliance since 2015, the Luxembourgish company serves worldwide customers in 36 different countries with more than 150 licenses established, ranging from cryptocurrency businesses to financial institutions with crypto trading, custody branch, digital assets customers onboarding, audit and law firms and some LEAs.
Scorechain solution supports Bitcoin analytics with Lightning Network, Ethereum analytics with all ERC20 tokens and stablecoins, Litecoin, Bitcoin Cash, Dash, XRP Ledger and Tezos. The software can de-anonymize the Blockchain data and connect with sanction lists to provide a risk scoring on digital assets transactions, addresses and entities. The risk assessment methodology applied by Scorechain has been verified and can be fully customizable to fit all jurisdictions. 300+ risk-AML scenarios are provided to its customers with a wide range of risk indicators so businesses under the scope of the crypto regulation can report suspicious activity to authorities with enhanced due diligence.