The Turkish Capital Markets Board (CMB) has blocked 46 websites, including the popular decentralized exchange PancakeSwap, for “providing unauthorized crypto services.” In a Thursday notice, CMB announced legal action against websites, citing provisions of Turkey’s Capital Markets Law.
The Turkish financial regulator, CMB, announced that it had taken legal action against PancakeSwap, a high-profile DEX that handled over $325 billion in trading volume in June. The CMB did not specify how it determined PancakeSwap was in breach of Turkish law.
PancakeSwap has now become the first decentralized exchange banned in Turkey. The exchange failed to meet the licensing requirement set by CMB. Apart from PancakeSwap, CMB also banned Cryptoradar and Exchange Investr, along with more than 40 other websites.
CMB has not yet released a criterion behind the enforcement, and PancakeSwap has not commented on the action. However, this step could be seen as a part of a broader strategy in Turkey, as the regulators are aiming to advance their goal of improving market stability and investor protection.
Turkey is enhancing its regulatory framework to protect users from potential financial risks and illicit transactions. Under new regulations, it is tightening its security measures by increasing crypto market transparency through licensing and anti-money laundering (AML) rules. So the decision of the PancakeSwap ban follows the regulatory authority granted to the CMB last year, allowing it to block unlicensed foreign cryptocurrency service platforms targeting Turkish users.
On 28th June, Turkey published new, stricter rules for crypto in the Official Gazette, to maintain security and transparency in the transactions. Under Law No. 5549, the regulators introduced new transfer limits, mandatory waiting periods, and anti-money laundering (AML) policies in a bold move to tighten CMB oversight over crypto. Besides this, the country implemented a series of new regulations to mitigate risks in the crypto space.
It is crucial for all crypto service-providing platforms to seek proper approval from official regulators to continue operations in Turkey. This enforcement of banning websites is a precedent for other exchanges and platforms to comply with the Turkish regulatory regime. CMB and PancakeSwap have yet to deliver a comment regarding the enforcement.
The Turkish Capital Markets Board (CMB) banned PancakeSwap for “providing unauthorized crypto services” and failing to meet the licensing requirements it set for virtual asset service providers. The specific details of the breach weren’t elaborated, but it falls under the CMB’s authority to block unlicensed foreign platforms targeting Turkish users.
The ban restricts direct access for Turkish users to PancakeSwap and the other 45 blocked platforms, pushing them towards licensed, centralized exchanges or potentially into less secure methods like VPNs to bypass restrictions. This could reduce DeFi participation and stifle innovation within Turkey’s crypto community.
The article doesn’t specify if PancakeSwap can appeal the ban directly. However, for any crypto service provider to operate legally in Turkey, they would need to comply with the CMB’s licensing requirements and new regulations, including AML/CFT and KYC rules. The ban sets a precedent for platforms to seek proper approval.
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