Best practices for IT audits in cryptocurrency companies amid evolving regulations

As cryptocurrency markets continue to evolve rapidly, the importance of strong IT audits has never been clearer, especially with increasing regulatory scrutiny in countries like Turkey, Germany, the United States, and across the European Union (EU). These regulations focus on transparency, security, and consumer protection, making it crucial for cryptocurrency platforms to implement robust IT audit practices that ensure trust and operational efficiency.

In 2023, Turkey had approximately 7 million cryptocurrency users, a significant number given its population of 85 million, representing 8% of the population. By comparison, Germany, with a similar population size (around 84 million), has approximately 10 million cryptocurrency users, accounting for about 12% of its population. Other European countries, in Poland, around 5% of the population uses cryptocurrencies, while in Portugal, the rate is slightly higher at 9%. The US, with a population of 330 million, has approximately 66 million cryptocurrency users, accounting for about 20% of its population. This data highlights how Turkey is keeping pace with European countries and the US in cryptocurrency adoption.

Turkey has introduced strong, modern regulations for cryptocurrency platforms. In 2023, the Turkish Official Gazette1 published regulations requiring platforms to segregate customer funds and track transactions transparently. These regulations align closely with the EU's Markets in Crypto-Assets2 (MiCA) Regulation, providing a framework for crypto asset supervision. Turkey has rapidly adapted and implemented these dynamic regulations, creating a robust compliance infrastructure in line with global best practices. Germany, on the other hand, recognised cryptocurrencies as financial instruments in 2019, and oversees them through the Federal Financial Supervisory Authority (BaFin).

IT audits of cryptocurrency platforms should verify adherence to customer asset segregation rules and evaluate risk management systems to ensure compliance with anti-money laundering and cybersecurity standards3. Auditors should confirm that platforms comply with regulations that prohibit leveraged trading and derivative transactions, as seen in Turkey and some EU countries.

Auditors must also assess the security protocols for digital wallets, including cold storage and multi-signature solutions, and evaluate incident response strategies. In countries like Turkey, platforms must document procedures for monitoring market irregularities and report findings to regulators4, aligning with global best practices.

As the cryptocurrency market continues to grow, so do the regulatory expectations. By aligning audit practices with regulations in place in countries like Turkey, the US, and across the EU, cryptocurrency companies can enhance security, transparency, and trust, which are crucial for long-term operational success. Countries like Turkey, Germany and the US, have strong and dynamic regulatory frameworks and are expected to continue strengthening their oversight in this area.

References

1. Republic of Turkey Official Gazette, "Regulations on Crypto Asset Platforms”, 2023.
2. European Union, "Markets in Crypto-Assets (MiCA) Regulation”, European Commission, 2022.
3. US Department of the Treasury, "Cryptocurrency Compliance Guidelines and AML Standards”, 2023.
4. Capital Markets Board of Turkey, "Communiqué on Crypto Asset Service Providers (III-35/B.1)”, 2023.

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Eliz Özer is Chief Expert at Strategic Management and Consulting Services at Finansal Eksen Audit and Consultancy Inc., with extensive experience in finance and multinational real sector projects.