Country overview

Turkey is a scorching crypto market (possibly the largest in Europe) and could be more stable. The government’s position is quite favorable and allows foreign exchanges to operate. But again, it is unclear what the new regulation will be like, which may allow only local or generally only “correct” sites to operate in the Turkish market. Typically, this is an up-and-coming market for any activity, but there is still no regulation and risks.

Cryptocurrencies are prevalent due to high inflation. The official figure for 2022 is 83%, and the unofficial figure is 183%. Paribu, a local exchange, estimates (1) the number of crypto users at least 8 million. Kucoin estimates (2) their number even higher - among the population aged 18-60 years, it’s 52%.

Turkey has a considerable danger security level according to our rating. Jurisdiction has 59.8 points (from 100) for safety level in Numbeo crime rating (3). Homicide level (4) is 2.5 per 100,000 inhabitants a year. Story of firearm-related death (5) 1.95 per 100,000 inhabitants a year.

The Central Bank banned(6) crypto payments in 2021. Here is the official document (6¹) from the Central Bank.

As crypto payments, crypto salaries are banned in the country, too.

The legal basis for the operation of exchange platforms was given in a 2021 bylaw with requirements for crypto exchanges from the local AML regulator, MASAK. Little regulation is spelled out - only obligations for KYC, identification of suspicious transactions, and filing reports with MASAK.

Local exchanges operate as digital platforms without a special license. The largest local online media at the moment are BTCTurk and Paribu. Gate also entered this market by creating its crypto exchange, GateTurk.

Foreign crypto exchanges like Coinbase and OKX also operate in Turkey. Based on the exchange website, Binance does this through separate local legal entities.

At the same time, one of the guarantees of legality for exchanges is cooperation with partner banks, including VakıfBank, Ziraat, DenizBank, QNB, Papara, Yapı Kredi, and Akbank.

The government also planned to adopt (7) special crypto laws at the end of 2021; this topic has come up periodically since then. They planned to introduce licensing for crypto exchanges and remove foreign exchanges from the market.

There are also offline exchanges. In particular, as an example of such a legal offline exchange, Aljazeera (8) writes about NakitCoins (9) exchange. According to the legal status of offline exchange in the country, NakitCoins founder Cem Yilmaz says that it is difficult/impossible for Turkish citizens to buy crypto for cash lira due to official restrictions and that most clients are foreigners. However, he hopes for new regulations.

The largest local platforms, Thodex and Vebitcoin, have filed for bankruptcy. Both stories are confusing and show the potential risks of Turkish jurisdiction.

There has yet to be an official taxation procedure for crypto income in Turkey. Don't hesitate to contact us if you have more information about it. According to Aljazeera (10), there are rumors of a possible government imposing a 40% capital tax on cryptocurrencies. This means that there is no such tax and no such procedure yet. Most likely, individuals are paying the standard PIT or hiding their income.

1 and 2)‘Basically a Savior’: Why Crypto Is So Popular in Turkey. Article

3)Crime Index by Country 2023 Mid-Year

4)List of countries by intentional homicide rate

5)List of countries by firearm-related death rate

6)Turkey to Ban the Use of Crypto for Payments; Bitcoin Falls

6¹)NOT USING CRYPTO ASSETS IN PAYMENTS RELATED REGULATION. Newspaper

7)Lessons From the Turkish Government's Hasty Attempt to Regulate Cryptocurrencies. Article

8 and 10)Crypto investing is alive and well in Turkey, thanks to lira woes. Article

9)Buy and Sell Bitcoin With Cash in Turkey Instantly, Easily & Safely. Article

11)Individual - Taxes on personal income. PWC

12)Corporate - Taxes on corporate income. PWC

13)Overview. PWC