Sun. Sep 19th, 2021


Turkey on Thursday sent a notice to cryptocurrency exchanges operating in the country requesting user information, a development that was interpreted by some as a move linked to tax regulations of digital currency.

Treasury and Finance Ministry was said to have asked for information from ID number and title to the value of the cryptocurrency in Turkish lira.

In a statement following the reports on the development, the ministry said financial intelligence units around the world fight the laundering of criminal revenues and financing of terrorism.

Stressing heavy usage of cryptocurrencies in such crimes, the ministry noted that the Financial Crimes Investigation Board (MASAK) can request information from platforms to prevent and track crimes.

The statement also added that MASAK collaborates with institutions during investigations and develops strategies to fight financial crimes and the request for user information is due to necessity stemming from financial investigations.

The already growing boom in Turkey’s crypto market has further gained pace over the recent period, with investors hoping to both gain from bitcoin’s rally and shelter against inflation.

The government last month said it shares global concerns regarding cryptocurrencies and that the developments are being closely followed.

Treasury and Finance Minister Lütfi Elvan stressed they “have serious concerns about cryptocurrencies.”

“It is not just us, there is anxiety all over the world,” he added. “We have appointed our deputy minister regarding the bitcoin transactions in Turkey.”

Turkey’s taste for crypto

Trading volumes between the start of February and March 24 hit TL 218 billion ($27 billion), data from U.S. researcher Chainalysis shared with Reuters showed, surging from a little over TL 7 billion in the same period a year earlier.

The jump echoes soaring global interest in crypto, driven by bitcoin’s rally to a record of just under $62,000 as major investors and companies embraced the emerging asset.

Yet investors in Turkey said a weaker Turkish lira and inflation pressures, as well as hopes of quick gains, have driven the demand for the cryptocurrency.

Many of them shrugged off the volatility of cryptocurrencies, which financial watchdogs across the world have warned could lead to investors losing their money.

Bitcoin’s march to record highs has come as governments and central banks open the stimulus taps to counter the economic damage caused by the coronavirus pandemic.

A narrative that its limited supply makes it impervious to inflation – bitcoin is often seen as a store of value, despite its volatility – has partly fueled its gains.

In Turkey, inflation jumped more than expected to nearly 16% in February.

The cryptocurrency exchange BtcTurk alone is said to have attracted over a million new users between January and March.

Between March 20-24, crypto worth TL 23 billion was traded, Reuters cited the data, versus TL 1 billion in the same period last year.

Turkish Google searches for cryptocurrency hit a record high in recent weeks.

Analysts said investors also bought stablecoins, designed to avoid the volatility of bitcoin.