MASAK’s New Steps Will Determine the Boundaries of the Crypto World

The increasing popularity of crypto assets is becoming increasingly widespread around the world as a reflection of digital transformation.

However, this innovation brings with it serious risks such as laundering proceeds of crime and financing terrorism. Wanting to control these risks, the Financial Crimes Investigation Board (MASAK) has published a series of regulations that impose strict obligations on Crypto Asset Service Providers (KVHS).

So, what are the importance and effects of the new rules brought to KVHS within the scope of MASAK’s Regulation on Prevention of Laundering Proceeds of Crime and Financing of Terrorism? How might these regulations shape the future of the digital finance industry?

Obligations Awaiting Crypto Asset Service Providers

MASAK defines KVHSs as an important part of the financial system and evaluates customer transactions within the scope of “continuous business relationship”.

This means identification becomes mandatory for all customers, regardless of transaction amount. For transactions of 15 thousand TL and above, details such as identity information, wallet addresses and reference numbers must be recorded completely.

This requires identification of all customers, regardless of the transaction amount. In the eyes of MASAK, KVHSs are no longer just intermediary institutions but also players responsible for the legal order of the financial system.

Compliance Program: More than a Order

The regulation makes it mandatory for KVHSs to create a compliance program. This program needs to include the following elements:

Writing corporate policies and procedures. Organizing risk management activities. Establishing monitoring and control mechanisms. Appointing a compliance officer and establishing a compliance unit. Training the personnel on compliance with legal regulations and conducting internal audits on an ongoing basis.

MASAK has given a limited period of time from the publication of the regulation for the appointment of compliance officers. This means that KVHSs need to work much more closely with both regulatory authorities and industry dynamics.

Remote Identification: The Balance of Technology and Law

Another notable regulation of MASAK was regarding remote identification. It is necessary to verify identity documents with NFC technology, match biometric data and record this entire process. This step is of great importance for an industry that is embracing digital transformation and moving away from traditional financial transaction methods.

However, there are also outstanding problems here. Remote identification poses a number of risks in terms of both technical infrastructure and customer privacy. Therefore, it becomes a very critical issue for CVHSs to implement this system with a risk-based approach.

Legal Sanctions: Serious Penalties Ahead

If KVHSs do not comply with MASAK regulations, there are severe legal sanctions. In case of confidentiality violation or failure to report suspicious transactions, various sanctions may be imposed, from fines to cancellation of business license. This situation underlines how sensitive stakeholders in the crypto industry must be regarding compliance with the law.

How Do Regulations Affect the Industry?

MASAK’s obligations aim to reduce the risks of money laundering and terrorist financing by forcing transparency on crypto asset service providers. However, it is still a question mark to what extent these rules will affect the dynamism and innovation potential of the market.

However, regulations may create new opportunities for adapting players. An auditable and secure financial environment within certain frameworks can not only attract investors but also accelerate the institutionalization of the sector.

Transformation is Inevitable in the Crypto Ecosystem

While crypto assets are making their debut in the financial world with their innovation-oriented structure, regulatory authorities such as MASAK are trying to minimize risks by controlling this sector. However, a fine balance is needed to ensure that these regulations do not hinder innovation. The compliance of KVHSs with these new rules is not only a legal obligation, but also a critical step for the sector to continue its long-term growth.

As the crypto ecosystem transforms, those who embrace and adapt to this transformation in the best way seem to be the winners of the future. Will the new order brought by MASAK be an obstacle or an opportunity for the sector? Of course, the way of implementation, industry dynamics and time will tell.