Northern Cyprus's Crypto Shops: A Hub for Money Laundering Concerns
Located in Northern Cyprus, Kyrenia is a Mediterranean town that has become an unlikely hub for cryptocurrency transactions. The area's economic isolation has created a unique financial ecosystem, with cash-to-crypto shops seemingly operating freely.
The author visited the town to investigate reports of large-scale cryptocurrency flows from the region, which allegedly reach wallets in Lebanon linked to Hezbollah and Hamas-related financial networks.
At multiple crypto shops, the author discovered that it was possible to exchange a significant amount of physical cash for USDT, a dollar-linked stablecoin. The fees ranged from 1.5% to 2%, with some shops willing to accept as much money as desired without any questions or Know Your Customer (KYC) procedures.
The author's observations sparked concerns about potential money laundering and the area's vulnerability to financial crime, given its isolated status and lack of international recognition as an independent state. This situation is compounded by plans to increase the number of casinos in Northern Cyprus from 32 to 64, which critics warn may exacerbate the problem.