‘No tolerance for financial misuse,’ Şimşek warns crypto firms

ANKARA

Finance Minister Mehmet Şimşek on Wednesday issued a strong warning to cryptocurrency service providers and payment institutions, emphasizing that the country will not allow its financial system to be abused for illicit activities.

Şimşek detailed recent regulatory steps taken by the Financial Crimes Investigation Board (MASAK), including new compliance requirements that went into effect following a decree published in the Official Gazette on December 25, 2024.

“We are determined to align Türkiye’s financial system with international standards,” Şimşek said. “We will not give those seeking to abuse our financial system any room to operate.”

The minister reminded that financial institutions had already been warned against facilitating the sharing of personal and financial data with illegal betting sites. Now, with the new phased regulations, crypto service providers and payment companies will face serious penalties for non-compliance.

The updated framework brings crypto service providers under the same MASAK obligations as banks, brokerage firms, and insurance companies.

“These new rules will strengthen the reliability and transparency of our financial system,” Şimşek noted, adding that the new measures have been shared with sector stakeholders via banking, participation banking, and capital markets associations.

Under the regulation, crypto platforms must implement compliance programs, appoint compliance officers, and establish mechanisms for risk management and transaction monitoring. They must also register with the e-notification system and apply strict “Know Your Customer” (KYC) measures.

Initial transactions must now be carried out through banks, and any crypto transfer lacking sufficient information — as required by the international “travel rule” — will be blocked.

Şimşek also highlighted concerns about privacy-focused cryptocurrencies often used in illicit activity. MASAK is introducing tighter customer acceptance protocols for platforms dealing in such assets.

“Platforms that facilitate anonymous crypto trades are now subject to stricter controls,” he said.

Additionally, stablecoins — which MASAK has identified as frequently used in money laundering and terrorism financing — are now under close monitoring. “MASAK will soon introduce further regulation in this area,” Şimşek confirmed.

The new MASAK rules extend to payment institutions as well. Simplified customer onboarding is no longer allowed, and both virtual and physical point-of-sale (POS) terminals will be monitored to ensure they are being used appropriately.

“We’re closely watching payment institutions, especially regarding illegal betting and fraud-related money laundering,” Şimşek said.

He concluded by reiterating that the new framework marks a major shift in Türkiye’s efforts to combat financial crime and enhance the integrity of its rapidly evolving digital finance ecosystem.