Turkey Passes Crypto Regulation With Exchange Licensing...

Turkey finally brings its crypto exchanges under formal regulatory oversight, but the country's track record with financial regulation gives plenty of reason to watch implementation closely before celebrating.

What the new law requires

Turkey's Capital Markets Board (CMB, known domestically as SPK) now has formal authority over crypto asset service providers under an amendment to the Capital Markets Law passed in late 2025. The framework creates a licensing regime for exchanges, custodians, and other crypto intermediaries operating in or serving Turkish residents.

The license categories break down into three tiers. Tier 1 covers full-service exchanges offering spot trading, custody, and fiat on/off ramps, with a minimum capital requirement of TRY 100 million (roughly $3 million at current rates). Tier 2 applies to custody-only providers and requires TRY 50 million. Tier 3 covers advisory and data services at TRY 10 million. All tiers require segregation of client assets, AML/KYC programs compliant with MASAK (Turkey's financial intelligence unit) standards, and quarterly reporting to the CMB.

These numbers sound reasonable until you factor in the lira's volatility. TRY 100 million is $3 million today. A year from now, that figure could shift 20% in either direction. The law denominates requirements in lira, which creates a moving target for international operators evaluating the market.

What happens to existing exchanges

Turkey's crypto market is dominated by domestic players. BTCTurk, the country's oldest exchange, and Paribu, which claims the largest user base, together handle the majority of Turkish trading volume. Both have operated in a regulatory gray zone since launching, legal but essentially unregulated at the platform level.

Under the new framework, existing exchanges have a 12-month transition window to apply for and obtain CMB licenses. During the transition, they can continue operating but must submit to preliminary compliance audits within the first 90 days. Exchanges that fail to apply within six months face suspension of new customer onboarding. Those that don't complete the licensing process within 12 months face shutdown orders.

BTCTurk and Paribu will almost certainly obtain licenses. They have the capital, the compliance teams, and the political connections. The real question is what happens to the 20 to 30 smaller Turkish exchanges that have operated on thin margins. Some will merge. Others will close. A few will try to move offshore and serve Turkish users remotely, which the new law explicitly prohibits (though enforcement of that prohibition is another matter entirely).

One of the world's largest markets, now with rules

Turkey consistently ranks among the top five countries globally for crypto trading volume. Estimates suggest 8 to 12 million Turks hold crypto assets. The reasons are straightforward: persistent inflation above 50%, a lira that has lost over 80% of its value against the dollar since 2018, and limited access to foreign currency accounts for ordinary citizens. Crypto has been a survival mechanism, not a speculative hobby.

This context makes regulation both necessary and politically sensitive. The government collapsed the TerraUSD-linked Thodex exchange scandal in 2021, where founder Faruk Fatih Ozer fled with an estimated $2 billion in user funds. That event demonstrated what unregulated exchanges can cost retail investors. But Turks also distrust financial regulation, particularly after the 2016 post-coup purge that saw the government seize businesses and freeze accounts on political grounds.

Skepticism is warranted

Turkey's regulatory institutions have credibility problems. The Central Bank has cycled through five governors in four years. Interest rate policy has reversed multiple times based on political pressure rather than economic fundamentals. The CMB itself has faced criticism for inconsistent enforcement in equity markets, where connected firms receive treatment that smaller companies do not.

Will the CMB regulate crypto exchanges fairly and consistently? The framework on paper looks competent, borrowing heavily from the EU's MiCA regulation and the UAE's VARA framework. But frameworks on paper and enforcement in practice are different things in Turkey. Operators in the UAE and Singapore should watch the implementation before treating a Turkish license as equivalent to their own regimes.

For international exchanges considering entering Turkey, the licensing path is now clear, even if the destination remains uncertain. The 12-month transition window gives everyone time to evaluate whether the CMB can deliver on its regulatory promises. Past performance suggests cautious optimism at best.