As Turkey’s still nascent but growing new business sector begins to take shape, big players are adjusting business plans in the face of changing regulations The Capital Markets Board (CMB) confirmed on November 29, 2024, that the popular U.S.-based crypto exchange Coinbase, has retracted its pre-application to penetrate the Turkish crypto market. The move follows similar actions by other firms, including Turkey’s QNB Digital Assets — a division of QNB bank — which also implemented liquidation proceedings.
Coinbase’s Strategic Withdrawal
Coinbase stated earlier this year plans to enter Turkey’s growing crypto market that ranks fourth in the world with a trading volume of $170 billion, according to Chainalysis. But the recent withdrawal of its application has come into question. Coinbase has not offered specific reasons for this shift in strategy at this time. This shows the company’s structured withdrawal from planned Turkish operations, as Coinbase Turkey Yazılım Teknolojileri AŞ also appears in the updated list of firms on liquidation submitted to the CMB.
Regulatory Pressures and Market Responses
Coinbase’s exit is not singular, by the way. Other firms to shut down and file for liquidation include QNB Digital Assets, Bitget, Finceptor, Koinim, Stanfex and XYZ Technology. The developments thus raise the number of firms applying for liquidation in Turkey to 14, with 77 applicants still pending.
On the other hand, exchanges like Bitfinex, Bitbns, Bitlo, OKX and Rain Software are applying for opportunities to offer asset custody services in Turkey. Such differences in corporate strategy highlight the country’s complicated and fast-changing regulatory landscape.
Binance’s Compliance Measures
Separately, Binance, another major crypto exchange, said in October 2024 it had shut its retail referral program for its Turkish users to comply with local regulations. According to the firm, “All referral codes are used to sign up via Binance. (Turkish users will no longer be able to use this feature.) Com are invalid. This follows Binance’s attempt to comply with Turkish regulators’ intensive rules that have resulted in a heightened crackdown in the former Ottoman lands over the last year.
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Turkey’s Evolving Regulatory Landscape
Turkey had been cracking down on its crypto space before this, with regulations tightening. In early 2023, the government presented its comprehensive legislation to enhance the monitoring of digital asset exchanges. The new laws (as reported in some details here) include large penalties on exchanges that do not comply, from fines of up to $182,600 to imprisonment of up to five years for unauthorized operations.
In another recent statement, Finance Minister Mehmet Simsek allayed fears that crypto profit would be taxed in June. He added: “Right now our agenda does not include taxation on profits regarding crypto assets and the stock market. In which there can only be a very nominal fee or tax on a transaction basis.” The statement leaves the door open for taxing profits in a direct way in the future, which could further burden crypto companies in Turkey by adding costs to the trading layer.
Implications for the Crypto Industry
The recent withdrawals by Coinbase and other companies shed light on the difficulties that global crypto companies have faced in working in its reining regulatory landscape. China’s attempts to create a tighter and safer crypto market brought new chances and challenges. With such unprecedented situations, companies can balance the potential for growth with the need for compliance and risk associated with changing regulations.
With this in mind, the industry may witness more tactical maneuvers from both domestic and foreign entities, as Turkey perfects its cryptocurrency regulation strategy. Such a balance between fostering innovation and ensuring financial stability continues to be a delicate one, and the moves of companies such as Coinbase and Binance are broadly indicative of how the rest of the industry is responding to the changing dynamics at play here.
Conclusion
To summarize, Turkey’s crypto ecosystem is on the threshold of a turning point. While the government regulatory move is designed to make the trading environment safer, companies too are forced to keep evolving rapidly. Coinbase and Binance: U.S.’s Legal Compliance Crossroads Together Reveal a Border Between their Operations Reflecting a Near Future of Many Cryptos that U.S. Policy Reflects a Need to toe the Line of Local Law As Local Law in both Countries decides what Can Exist or Not.
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