After PancakeSwap ban, Turkey may target other DeFi services, regulators explain

After a recent ban on PancakeSwap, Turkish regulators may soon crack down on other DeFi services and wallets.

Turkey’s recent ban on PancakeSwap (CAKE) decentralized exchange brought concerns that other DeFi services may follow. A recent panel by regulators, during the Istanbul Blockchain Week, suggested that this may be the case.

In a transcript shared with crypto.news, regulators outlined the new criteria for enforcement, which also apply to DeFi services. Under the new framework, DEXs and even non-custodial wallets would be required to follow the same rules as centralized services.

Still, this does not mean that all such services would be banned. According to Ali İhsan Güngör, Executive Vice Chairman of the Capital Markets Board of Türkiye, the regulations follow the so-called dissemination principles. Specifically, DeFi products that market themselves to Turkish citizens will have to abide by local regulations.

“A Turkish citizen can, entirely of their own free will, receive services from another institution abroad, as capital movements are already free,” Güngör, explained. “However, if institutions or entities providing DeFi services direct their activities towards Turkey, through widespread promotion, advertising, or marketing, then they become subject to our regulations.”

Turkey bans PancakeSwap for promotions to its citizens

“We have already started to impose access blocks on such websites,” Güngör added. The chief regulator likely referenced the recent ban on PancakeSwap, along with 46 other websites, which happened on July 4.

The regulators ordered internet service providers to block PancakeSwap’s domain in the country, along with a ban on associated mobile apps and associated social media accounts. Still, regulators did not outline what channels PancakeSwap used to specifically target Turkish users.

PancakeSwap is a decentralized protocol without any registered branches or legal entities in Turkey. For this reason, the exchange would have trouble applying for the required crypto service provider licences in the country.