RESEARCH: Turkmenistan Cryptocurrency and Digital Asset Status

Executive Summary

• Turkmenistan has no specific legal framework governing cryptocurrency, digital assets, or virtual asset service providers (VASPs) as of 2024 (latest research date).
• No regulatory body has been designated to license or oversee cryptocurrency activities, and no entity has been licensed to operate a crypto exchange or digital asset business.
• The existing licensing regime in Turkmenistan operates under the Law of Turkmenistan "On Licensing of certain types of activities" and related presidential decrees, but this framework does not currently extend to virtual assets. Laws of Turkmenistan
• The legal and economic environment for enterprises is defined by the Law on Enterprises (adopted June 15, 2000), which addresses authorized capital and operational requirements, but makes no reference to digital assets. On enterprises
• Turkmenistan is not a member of the Financial Action Task Force (FATF) or MONEYVAL. According to the FATF's February 2024 public statement, Turkmenistan remains on the FATF "Call for Action" list (high-risk jurisdictions subject to counter-measures). The most recent FATF public statement confirming this status was issued in February 2024. FATF Public Statements - High-Risk Jurisdictions subject to a Call for Action
• Practical reality: cryptocurrency activity exists in a legal vacuum without explicit prohibition, licensing pathways, or regulatory clarity, creating significant compliance risk for businesses.
• Verdict: Operating a VASP in Turkmenistan is not explicitly prohibited but carries extreme regulatory risk due to absent licensing, unclear AML obligations, and no regulatory sandbox; not recommended without local legal opinion.

Tax Treatment

• No specific tax guidance for digital assets has been identified in Turkmenistan; the general tax code applies – seek local tax advice.
• The general taxation framework for enterprises is established under the Tax legislation of Turkmenistan, which requires all enterprises to comply with tax obligations, but this framework contains no specific provisions for cryptocurrency gains, digital asset income, or virtual asset transactions. On enterprises
• Enterprises in Turkmenistan are subject to taxation in accordance with the Tax legislation, and the Law on Enterprises explicitly states that taxation is carried out in accordance with tax legislation, but no tax treatment for digital assets has been defined. On enterprises
• No capital gains tax provisions applicable to cryptocurrency have been identified in Turkmen law.
• No value-added tax (VAT) treatment for digital asset transactions has been established in Turkmenistan.
• No withholding tax provisions specific to digital asset transactions have been identified.
• Material Gap: The Tax Code of Turkmenistan (not provided in sources) does not contain definitions or rules for digital assets as of the latest research date. Any crypto-related income would fall under general enterprise profit tax rules without clarity on valuation, timing, or deductibility.

Regulatory Framework

• The primary licensing framework in Turkmenistan is established by the Law of Turkmenistan "On Licensing of certain types of activities," which serves as the legal basis for all licensing activities in the country, though no virtual asset provisions exist within it. Laws of Turkmenistan
• Presidential Decree No. 1771 dated May 29, 2020 "On improving the organization of licensing activities in Turkmenistan" governs the overall licensing structure, assigning specific oversight responsibilities to various state agencies. Approval of the Regulation on licensing of transport-expediting activities
• The Agency for Transport and Communications under the Cabinet of Ministers is an example of a sectoral licensing authority created under this framework, indicating that licensing is organized by economic sector rather than through a unified financial regulator covering digital assets. Approval of the Regulation on licensing of transport-expediting activities
• The Ministry of Adalat (Ministry of Justice) participates in legislative development and is tasked with preparing amendments resulting from new licensing regulations, positioning it as a key legal institution in the regulatory framework. Approval of the Regulation on licensing of transport-expediting activities
• The Law of Turkmenistan "On Enterprises," adopted June 15, 2000, defines the legal, economic, and organizational basis for the creation, operation, and termination of enterprises in Turkmenistan, but contains no provisions addressing digital assets or virtual currency activities. On enterprises
• The Law on Enterprises has been amended multiple times (2009, 2012, 2013, 2015, 2016, 2017, 2018, 2019) with amendments concerning authorized capital, joint ventures, bank accounts, and labor relations, yet no amendment has introduced any digital asset-related provisions. On enterprises
• Foreign investment in Turkmenistan exists under separate legislation available through the investment promotion portal (Law "On Foreign Investments"), but no digital asset or cryptocurrency investment provisions have been identified in that framework. On foreign investments
• The enterprise legal framework specifies that enterprises may open bank accounts in credit institutions of Turkmenistan for storage of funds and exercising settlement, credit, and cash operations; this requirement extends to all enterprise activities, potentially impacting how digital asset businesses would handle fiat operations. On enterprises
• FATF/AML Status: Turkmenistan is not a member of the Financial Action Task Force (FATF) nor a member of MONEYVAL. According to the FATF's February 2024 public statement, Turkmenistan remains on the FATF "Call for Action" list (high-risk jurisdictions subject to counter-measures). The most recent FATF evaluation available is from 2010 (by the Eurasian Group), though this is significantly outdated. No FATF evaluation specific to virtual assets has been documented, and based on available sources, no AML authority or Financial Intelligence Unit (FIU) has been identified as having jurisdiction over virtual assets in Turkmenistan. FATF Public Statements - High-Risk Jurisdictions subject to a Call for Action
• Based on available sources, no financial intelligence unit (FIU) dedicated to virtual assets was identified in Turkmenistan. The Ministry of Foreign Affairs of Turkmenistan has a defined role in international legal cooperation, but no AML-specific authority dedicated to virtual assets was identified in the source material. GENERAL INFORMATION

Licensing Requirements

• No licensing regime exists for cryptocurrency exchanges, digital asset custodians, virtual asset service providers, or any form of crypto-related business activity in Turkmenistan, as the licensing law framework does not include virtual assets as a licensable activity category.
• The general licensing framework is described in the Regulatory Framework section above (Law on Licensing, Presidential Decree No. 1771, sectoral licensing model).
• Specific activities are licensed through sectoral regulations, such as the Regulation on licensing of transport-expediting activities approved in April 2022, but no analogous regulation for digital assets has been enacted. Approval of the Regulation on licensing of transport-expediting activities
• The licensing process in Turkmenistan follows a model where the President signs a Resolution confirming a specific Regulation on licensing for each activity type, with responsible agencies designated to oversee compliance; this mechanism has not been applied to any digital asset activity. Approval of the Regulation on licensing of transport-expediting activities
• No capital requirements for digital asset businesses have been established, as no licensing category exists; however, general enterprise law requires joint ventures to maintain a minimum authorized capital of 100 times the minimum wage established in Turkmenistan. On enterprises
• The application process for any business activity in Turkmenistan would require incorporation under the Law on Enterprises, which defines organizational-legal forms including public enterprises, individual enterprises, cooperative enterprises, joint ventures, enterprises of non-governmental organizations, economic societies, and joint-stock companies. On enterprises
• No application timeline for digital asset licensing exists because no licensing pathway has been created for such activities; the only licensing timelines documented in Turkmenistan relate to specific sectors like transport-expediting activities. Approval of the Regulation on licensing of transport-expediting activities
• Structural requirements for enterprises in Turkmenistan include provisions for authorized capital, management structure, and legal status as defined by the Civil Code of Turkmenistan, but these are general requirements applicable to all enterprises, not specific to digital asset businesses. On enterprises
• ZERO entities have been licensed to conduct cryptocurrency or digital asset activities in Turkmenistan; no exchanges, brokers, custodians, or other VASPs have received authorization from any Turkmen state body.
• The Agency for Transport and Communications under the Cabinet of Ministers demonstrates the sectoral licensing model in Turkmenistan, where each industry has a designated licensing authority; no such authority has been designated for digital assets. Approval of the Regulation on licensing of transport-expediting activities
• The Ministry of Adalat (Ministry of Justice) is involved in legislative processes related to licensing regulations, indicating that any future digital asset licensing framework would require coordinated action between this ministry and the relevant sectoral agency. Approval of the Regulation on licensing of transport-expediting activities
• The authorized capital requirements for enterprises under Turkmen law vary by organizational-legal form, with state enterprises having their minimum statutory fund determined by the state body that issues the establishment act. On enterprises

AML/KYC Requirements

• No AML/KYC requirements specific to virtual asset service providers have been implemented in Turkmenistan, as no such providers are recognized or licensed under Turkmen law.
• The general enterprise legal framework requires enterprises to be fully responsible for the observance of fiscal discipline related to settlement, credit, and cash operations, which would broadly apply to any financial transactions conducted by businesses. On enterprises
• Cash settlements of enterprises under their obligations are generally made through credit institutions in a cashless manner, establishing a baseline expectation of financial transparency for all business operations in Turkmenistan. On enterprises
• Enterprises in Turkmenistan are required to open bank accounts in credit institutions of Turkmenistan for storage of funds and exercising all types of settlement, credit, and cash operations, with the procedure for foreign bank accounts established by legislation. On enterprises
• The taxation of enterprises is carried out in accordance with the Tax legislation of Turkmenistan, and enterprises must maintain tax compliance, though no provisions address digital assets. On enterprises
• No customer due diligence (CDD), enhanced due diligence (EDD), suspicious transaction reporting (STR), record retention, beneficial ownership, or politically exposed person (PEP) screening requirements specific to virtual assets were identified in any Turkmen legislation cited in the provided sources.
• FATF Travel Rule & VA-specific AML: No legislation implementing FATF Recommendation 15 (virtual asset service providers) or the "Travel Rule" has been identified. Based on available sources, no designated Financial Intelligence Unit (FIU) for virtual assets has been identified, meaning no STR framework exists for crypto transactions.

Enforcement Actions

• No enforcement actions, penalties, fines, arrests, or legal cases related to cryptocurrency or digital asset activities in Turkmenistan were identified in any of the provided source materials.
• No cryptocurrency-related prosecutions, regulatory sanctions, or court decisions were documented in the sources reviewed for this research, reflecting the absence of a regulatory framework rather than the absence of activity.
• The absence of enforcement actions does not indicate legal permission for crypto activities; rather, it reflects the complete lack of regulatory attention to digital assets in Turkmenistan.

Key Gaps & Risks

• Turkmenistan has no legal definition of cryptocurrency, digital asset, virtual currency, or related terms in any officially published law available in the provided sources, creating fundamental legal uncertainty for any business seeking to operate in this space.
• No regulatory authority has been designated with jurisdiction over digital assets; the licensing framework exists but lacks any agency with the mandate to license, supervise, or examine virtual asset service providers.
• Based on available sources, no AML authority or FIU for virtual assets has been identified in Turkmenistan.
• The gap between Turkmenistan's existing financial regulations, which require transactions to flow through credit institutions, and the decentralized nature of cryptocurrency creates a de facto prohibition risk for digital asset businesses seeking to operate legally.
• Enterprises in Turkmenistan are required to conduct cash settlements through credit institutions in a cashless manner, suggesting that crypto-to-fiat conversions would need to occur through the formal banking system, which has no legal basis to service such transactions. On enterprises
• The Law on Enterprises requires enterprises to maintain compliance with fiscal discipline for settlement, credit, and cash operations, but provides no guidance on how digital assets should be treated for these purposes. On enterprises
• Practical reality for businesses: operating a cryptocurrency business in Turkmenistan would require either working entirely outside the legal framework (accepting illegality risk) or finding an unregulated niche, as there is no lawful pathway to establish a regulated digital asset business.
• The absence of FATF-aligned virtual asset regulations means that Turkmenistan does not meet international standards for crypto regulation, which could impact international business relations and correspondent banking relationships.
• Because no licensing pathway exists, businesses cannot achieve regulatory compliance, cannot obtain legal certainty, cannot access the formal banking system for crypto-related transactions, and cannot resolve disputes through regulatory channels.
• Any future regulation of digital assets would require multiple legislative acts: an amendment to or new law on licensing, designation of a regulatory authority, and amendments to the tax code, a legislative effort that has not been initiated. Approval of the Regulation on licensing of transport-expediting activities
• The lack of legal clarity creates significant investment risk, as foreign investors have no legal protections specific to digital assets and no regulatory certainty regarding their treatment. On foreign investments
• The practical reality is that cryptocurrency mining, trading, and related activities continue to exist in Turkmenistan without official recognition, leaving participants vulnerable to sudden enforcement actions, account freezes, or prosecution under general financial laws.
• No rules exist for initial coin offerings (ICOs), security token offerings (STOs), or any other form of digital asset fundraising, making such activities legally impossible to conduct in compliance with Turkmen law.
• The absence of a virtual asset regulatory framework contradicts Turkmenistan's general approach to licensing, which is comprehensive for all recognized economic activities, highlighting the fact that digital assets remain entirely unrecognized as an economic activity. Approval of the Regulation on licensing of transport-expediting activities
• Businesses considering digital asset operations in Turkmenistan face legal uncertainty, potential prosecution under financial laws designed for fiat currency operations, inability to obtain banking services, and no recourse through regulatory authorities.

General Country Background (Appendix)

• The Cabinet of Ministers (Government) of Turkmenistan is the executive and regulatory body of the state, overseeing all regulatory activity including any potential future development of digital asset regulations. General information | ANKARA, REPUBLIC OF TÜRKİÝE - EMBASSY OF TURKMENISTAN
• The Mejlis (Parliament) of Turkmenistan is a unicameral representative body exercising legislative power, consisting of 125 deputies elected for five-year terms; it would be the institution responsible for any future legislation on digital assets. GENERAL INFORMATION
• The Constitution of Turkmenistan, adopted May 18, 1992, with a new edition dated September 14, 2016, is the Basic Law of the state and establishes the separation of legislative, executive, and judicial authorities; it contains no provisions related to cryptocurrency or digital assets. GENERAL INFORMATION
• Turkmenistan's legal system incorporates a hierarchical structure where the President of Turkmenistan serves as the Highest Official and Head of State and executive power, heading the Cabinet of Ministers and acting as guarantor of the Constitution and international obligations. General information | ANKARA, REPUBLIC OF TÜRKİÝE - EMBASSY OF TURKMENISTAN
• Turkmenistan is a democratic, legal, and secular state with a presidential republic form of government; its neutrality was recognized by the United Nations General Assembly Resolution on December 12, 1995, with unanimous support of 185 countries. GENERAL INFORMATION
• The Halk Maslahaty (People's Council) of Turkmenistan is a highly representative body that addresses problems of national importance and implements reforms and socio-economic programs. GENERAL INFORMATION

Sources

• Approval of the Regulation on licensing of transport-expediting activities
• On enterprises
• GENERAL INFORMATION
• Mejlis of Turkmenistan adopts the Law on the legal status of Ashgabat
• About standardization | Main State Service «Turkmenstandartary»
• General information | ANKARA, REPUBLIC OF TÜRKİÝE - EMBASSY OF TURKMENISTAN
• Laws of Turkmenistan
• On foreign investments
• Information accessible to everyone
• The Mejlis of Turkmenistan adopts the Laws regulating legal relations in intellectual property | STATE MIGRATION SERVICE OF TURKMENISTAN
• FATF Public Statements - High-Risk Jurisdictions subject to a Call for Action (February 2024)