Turkey has confirmed that its existing Financial Crimes Investigation Board, MASAK, will oversee the regulation of cryptocurrencies in the jurisdiction.
The country will regulate cryptocurrency exchanges more closely, after it chose to include them on its anti-money laundering and terrorism financing (AML-TF) watch list.
Announced last week, the changes to regulation took immediate effect and are similar to a recent move by the US.
As a result, all 31 cryptocurrency exchanges in Turkey will be subject to close scrutiny by MASAK. The organisation will systematically request a list of customers and other relevant information that pertains to enforcing AML-TF regulation.
Moving forward, all exchanges will be obliged by law to require proof of residency and other government-issued IDs. Companies will also have to restrict access for any individuals who are currently on the government's blacklist for various financial or other offenses that legally exclude them from trading financial assets.
Turkey is stepping up its involvement in the crypto sector after the country announced a few months back that it's looking into potentially issuing its own central bank digital currency.
Recently, Turkey banned payment processors from issuing any transactions in Bitcoin, similar to what PayPal is doing since it enabled support for Bitcoin, Ethereum, and other cryptocurrencies. Crypto assets have not yet been fully defined in the country, which is likely to cause confusion down the road.
Turkey is joining a list of countries that are determined to get involved with cryptocurrencies and stop them from proliferating without regulation. Finding the correct regulatory framework would take some time it seems.
The government may be responding to developments from a few weeks back when Thodex and Vebitcoin, two crypto exchanges, disappeared from the country overnight, along with millions of consumers' crypto assets.