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Hassan Shittu

Journalist

Hassan Shittu

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Hassan, a Cryptonews.com journalist with 6+ years of experience in Web3 journalism, brings deep knowledge across Crypto, Web3 Gaming, NFTs, and Play-to-Earn sectors. His work has appeared in…

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June 24, 2025

Turkey’s Ministry of Treasury and Finance is tightening regulations on crypto asset service providers in a bid to clamp down on illicit financial activities. According to the Ministry, digital asset platforms must now collect and verify more detailed information about user transactions.

This information includes obtaining a written explanation of at least 20 characters describing the purpose of each transfer, along with verifying the origin of funds involved.

Per AA, the government believes this measure will enhance transparency and help identify suspicious activity earlier in the transaction process.

Turkey Impose Withdrawal Restrictions to Disrupt Illicit Flows

In a major shift, the new regulation imposes a delay on crypto asset withdrawals. Any crypto purchased, exchanged, or deposited will be subject to a 48-hour waiting period before it can be withdrawn.

For new users making their first withdrawal, the waiting period will extend to a minimum of 72 hours. Authorities believe these delays will reduce the ability of criminal actors to quickly transfer illicit funds outside the system before they are detected or blocked.

Stablecoins are also under scrutiny in the new regulatory framework. The Ministry will impose a daily transfer cap of $3,000 and a monthly limit of $50,000 for these digital assets.

These restrictions are designed to prevent the rapid movement of large sums of money that may be connected to illegal betting, fraud, or other criminal proceeds.

However, platforms that fully comply with the travel rule, which requires collecting identifiable information about both sender and receiver will be allowed to operate with limits twice as high.

While the regulations are strict, the Ministry emphasized that they do not aim to stifle legitimate activities within the crypto space. Treasury and Finance Minister Mehmet Şimşek stated that transactions linked to market making, liquidity provision, and arbitrage will be permitted without restriction.

Notably, the Ministry issued a clear warning to platforms that fail to comply with the new rules. Sanctions may include administrative penalties, financial fines, or even the denial or cancellation of operational licenses.

Turkey Continues to Tighten Crypto Legal Framework

The latest enforcement actions build on Turkey’s broader regulatory overhaul published on March 13, 2025, through amendments to Capital Markets Law No. 6362. These changes placed crypto platforms under the oversight of the Capital Markets Board (CMB).

Two communiqués, III-35/B.1 and III-35/B.2 set out new rules for platform structure, capital requirements, internal audits, and customer protection. Platforms must be joint-stock companies with minimum capital and approved management.

Aside from this, they are also required to conduct proof-of-reserve audits, partner with CMB-approved custodians, and maintain separate accounts for user funds.

Additional rules govern asset listings, conflict of interest policies, risk disclosures, and dispute resolution processes to enhance user safety and platform transparency.

Prior to then, Turkey introduced tighter crypto rules in February 2025 to strengthen anti-money laundering (AML) compliance and align with global standards. Announced in the last week of 2024, the regulations require crypto service providers to collect user identification for transactions over 15,000 lira (about $425).

Modeled after the EU’s MiCA framework, the rules aim to curb money laundering and terror financing, as Turkey’s presence in global crypto markets continues to grow.

The Cayman Islands has introduced new crypto licensing regulations that will require virtual asset service providers (VASPs) offering custody and trading services to obtain approval from the Cayman Islands Monetary Authority.

The rules, set to take effect on April 1, 2025, are part of a broader effort to align the jurisdiction with international standards aimed at strengthening investor protections and improving market integrity.

Mandatory license

The new framework, outlined in the Virtual Asset Service Providers Amendment Regulations 2025, mandates that all crypto firms operating in custody or trading services secure a formal license.

The regulation applies to both newly established entities and the 17 VASPs currently registered in the Cayman Islands. Companies will have a 90-day compliance window, which extends until July 1, 2025, to meet the necessary requirements.

As part of the licensing process, custody providers must disclose the types and values of digital assets they hold and provide a clear explanation of their custodial purpose. This measure is intended to ensure compliance with anti-money laundering and counter-terrorism financing standards.

Additionally, trading platforms will be required to report their projected revenue and disclose the physical location of their supporting hardware, a move designed to enhance regulatory transparency and jurisdictional oversight.

All applicants must submit cybersecurity plans, risk management strategies, and details on how they intend to prevent asset loss or theft, reinforcing efforts to address vulnerabilities in the digital asset sector.

Improving compliance

The regulations expand upon the Virtual Asset (Service Providers) Act 2020, which was updated last year to align with recommendations from the Financial Action Task Force (FATF).

In recent years, CIMA has been working to tighten regulatory measures. It previously implemented the “Rule for Virtual Asset Custodians and Virtual Asset Trading Platforms” to create a structured compliance environment for digital asset businesses.

The stricter licensing rules are expected to reshape the Cayman Islands’ crypto sector by raising the bar for operational compliance. With a stronger regulatory framework in place, the jurisdiction may attract established firms looking for a stable and well-regulated environment while weeding out operators that are unable to meet the requirements.

The upcoming July deadline is expected to spur system upgrades and compliance efforts among existing VASPs. The new requirement for trading platforms to disclose the location of their hardware could also improve accountability in cross-border transactions, potentially setting a precedent for other jurisdictions.

While the updated framework is designed to strengthen investor protections and market stability, smaller firms may struggle with the financial and operational demands of compliance. Meanwhile, larger players with greater resources may find it easier to meet the cybersecurity and risk management requirements, giving them a competitive advantage.

I’m trying to create a child inscription in a Taproot transaction, but I’m running into the following error:

sendrawtransaction RPC error: {"code":-26,"message":"mandatory-script-verify-flag-failed (Invalid Schnorr signature)"}

I checked all the data, including transaction structure, signatures, TapRoot scripts, and more, but the error persists.

The input refers to the parent UTXO.

{
  "txid": "02cde20c6db772c9ddced410c52cb2bdcbf476016fa398cfa1ac5207f1ff462f",
  "vout": 0,
  "value": 546,
  "scriptPk": "5120932a0391d2ec13cb8f303ded9297ece089f739b3ced40bc98eebdd277fdb9c9d",
  "address": "tb1pjv4q8ywjasfuhres8hke99lvuzylwwdnem2qhjvwa0wjwl7mnjwsdqu3e0"
}

The output sends 546 Satoshis to the recipient address. The Taproot script for the child’s inscription includes:

Parent inscription data (InscriptionID). Child inscription metadata.

const childOrdinalStacks = (
  publicKey,
  bitcoin.opcodes.OP_CHECKSIG,
  bitcoin.opcodes.OP_FALSE,
  bitcoin.opcodes.OP_IF,
  Buffer.from("ord", "utf8"),
  1, 1,
  Buffer.from("text/plain;charset=utf-8", "utf8"),
  1, 2,
  pointerBuffer1,
  1, 3,
  Buffer.from(parentInscriptionId, "hex"),
  1, 5,
  cbor.encode(childMetadata),
  1, 7,
  Buffer.from("parcel.bitmap", "utf8"),
  bitcoin.opcodes.OP_0,
);

RAW TX Hash

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

I’m using Tweaksigner to sign the input.

const signer = tweakSigner(wallet);
psbt.signInput(0, signer);
psbt.signInput(1, wallet.keyPair);


export function tweakSigner(wallet: Wallet, opts: any = {}) {
  let privateKey: any = wallet.keyPair.privateKey;
  if (!privateKey) {
    throw new Error('Private key is required for tweaking signer!');
  }
  if (wallet.keyPair.publicKey(0) === 3) {
    privateKey = ecc.privateNegate(privateKey);
  }
  const tweakedPrivateKey = ecc.privateAdd(privateKey, tapTweakHash(wallet.internalPubkey, opts.tweakHash));
  if (!tweakedPrivateKey) {
    throw new Error('Invalid tweaked private key!');
  }
  return ECPair.fromPrivateKey(Buffer.from(tweakedPrivateKey), {
    network: wallet.network,
  });
}


function tapTweakHash(pubKey: Buffer, h: Buffer | undefined): Buffer {
  return bitcoin.crypto.taggedHash(
    "TapTweak",
    Buffer.concat(h ? (pubKey, h) : (pubKey))
  );
}