Exchanges Like Coinbase and KuCoin Race for License in Turkey

The Turkish cryptocurrency landscape is undergoing significant changes as major exchanges like Coinbase and KuCoin vie for business licenses in the region. This influx of applications comes in response to regulatory updates from the Turkish Capital Markets Board (CMB), setting the stage for a more structured and secure market environment.

On August 9, the CMB revealed that 47 cryptocurrency companies had initially applied for licenses under the new regulatory framework. However, this number has since surged to 76, with prominent additions like Coinbase, KuCoin, and Gate.io joining the race.

Previously established firms such as Binance, Bitfinex, and OKX were already engaged in the application process, though these exchanges have faced substantial scrutiny over the years. For example, Binance was fined $751,314 by Turkish authorities in 2021 for failing to comply with implemented rules.

No Guarantee of Official Approval

Despite the progress reflected in the growing list of applicants, the CMB has made it clear that inclusion in the “List of Those in Operation” does not guarantee official authorization. Each company must still secure formal approval from the board, which hinges on the enactment of secondary legislation.

Turkey’s regulatory environment for cryptocurrencies remains in a state of flux. While comprehensive legislation has yet to be finalized, existing regulations already govern certain market activities.

Earlier this year, Turkish Treasury and Finance Minister Mehmet Simsek indicated that local crypto regulation was nearing completion. However, the anticipated draft has not yet been introduced to parliament, adding to the uncertainty within the sector. Nevertheless, this regulatory ambiguity has not discouraged firms from seeking licenses.

The surge in license applications follows the implementation of the “Law on Amendments to the Capital Markets Law,” which took effect on July 2. This law aims to provide a regulatory framework for crypto asset service providers in Turkey, signaling the country’s commitment to establishing a regulated and secure crypto market.

Crypto Adoption in Turkey

According to a report by Chainalysis, Turkey ranks as the fourth-largest crypto market globally, with an estimated trading volume of $170 billion. This places Turkey ahead of other significant markets such as Russia, Canada, Vietnam, Thailand, and Germany. 

However, this surge in interest has not been without challenges. In June 2024, Turkish cryptocurrency exchange BtcTurk reported a cyberattack that compromised digital assets stored in ten of its hot wallets. This breach, along with reports of suspicious transfers involving Avalanche tokens, highlights the ongoing security risks in the sector.