Turkey’s Capital Markets Board (CMB) has blocked 46 cryptocurrency websites, including PancakeSwap (CAKE), for providing unauthorized cryptocurrency services. The CMB is Turkey’s financial regulator and will start legal proceedings against the various crypto services. Turkey has recently taken steps to reduce unauthorized services being offered to Turkish citizens. PancakeSwap is one of the most successful Decentralized Exchanges (DEXs), alongside Uniswap and Curve. PancakeSwap had more than $325 billion in trading volume in June. It’s unclear at this stage why Turkish officials deemed the websites to be unauthorized, but the CMB would likely prefer that crypto services be appropriately registered. PancakeSwap is a Decentralized Exchange (DEX) on the Binance Chain. Turkey’s Capital Markets Board (CMB) blocked the DEX as part of a campaign to block unauthorised crypto projects. Turkey is intensifying its efforts to regulate the cryptocurrency industry. This is the first time Turkey has blocked a DEX. Governments around the world are seeking ways to regulate cryptocurrency as the relatively new technology becomes increasingly mainstream. One key area of concern is the phenomenon of ‘pig butchering’, where wealthy crypto holders are swindled out of their holdings with scams. Governments worldwide are deeply concerned about this trend. Turkey may be reducing its reliance on technologies that scammers could exploit. Turkey has emerged as a significant growth market for cryptocurrencies, with a notable increase in crypto trading from 25.1% in 2023 to 27% in 2024. However, this extra amount of trading has attracted the attention of Turkish regulators. Turkish crypto traders have been taking a keen interest in long-term investments and crypto use cases that promote financial inclusivity. Turkish authorities, however, are concerned about the price volatility of digital assets and illicit activities on the blockchain. They have tackled this problem by setting new standards for the crypto industry, including Know Your Customer (KYC) and licensing requirements. It is very possible that PancakeSwap was shut down due to not having the appropriate licenses to operate in the country. Yet PancakeSwap is a DEX, which means that it does not operate like a traditional finance business. The Capital Markets Board (CMB), the primary regulatory body in Turkey, has taken charge of the situation, outlining a new cryptocurrency agenda for 2025. The CMB now has full authority to regulate crypto service providers. First, the CMB identifies a crypto service provider, and then it regulates the service provider. This is what most likely happened with PancakeSwap, despite being a DEX, which was identified by Turkish officials as a crypto service provider. The CMB has been relentless in its efforts to tackle crypto crimes, making it mandatory to conduct identification checks for crypto transactions exceeding $425. Crypto transactions will further require a 20-letter note appended to the blockchain, ensuring a clear paper trail for all cryptocurrency activities. Crypto payments have been banned since 2021. Many countries around the world have adopted a heavy-handed approach to crypto trading. Turkey may very well be one of those countries. According to Turkish officials, a Crypto Service Provider must develop internal risk management strategies and have procedures in place to address money laundering on their platform. This includes reporting any suspicious activities to the appropriate authorities. Failure to report suspicious activities may prompt an external review by government officials. The Turkish government has established multiple threshold limits to prevent money laundering within the country, including a daily limit of $ 3,000 and a monthly limit of $50,000. Such measures would make it difficult for money launderers to conduct their business with ease. Crypto Service Providers that don’t abide by the rules may see their licenses revoked. The Turkish government is also trying to tackle illegal gambling, which has become a difficult business to cut back on.
