Turkey Set to Enhance Regulations on Cryptocurrency Assets, Says Finance Minister

Turkey is drafting new cryptocurrency asset legislation to incline an international anti-crime enforcement agency to delist it from a grey list. In 2021, Turkey entered the grey list of the Financial Action Task Force (FATF), an international crime watchdog. 

With its recent crypto regulatory action, Turkey aims to convince the FATF to delist it from the list of countries with inadequate anti-money laundering and terrorism financing regulations.

Cryptocurrency Assets at the Center of Turkey’s Regulatory Ordeal

Turkey’s gray list inclusion, despite most FATF compliance, raises its financial sector vulnerability concerns regarding illicit activities. The Finance Minister Mehmet Simsek recently addressed a parliamentary commission, revealing that Turkey fully complies with all FATF’s standards except one. 

Simsek said,

The only remaining issue within the scope of technical compliance is the work related to crypto assets.

While Turkey may have complied with most of the FATF’s standards, the watchdog identified shortcomings in overseeing cryptocurrencies. This deficiency necessitates urgent attention to prevent bad players from exploiting crypto assets for money laundering or terrorist financing. 

However, Turkey is determined to resolve this issue and regain the trust of the international community. The country plans to introduce new legislation specifically targeting crypto-assets.

Finance Minister Mehmet Simsek announced the forthcoming legislation, which will address the FATF’s concerns regarding crypto-assets. 

While the government has yet to reveal specific details of the proposed law, the initiative reflects its commitment to aligning with international standards on cryptocurrency regulation. 

Also, by introducing comprehensive legislation that effectively monitors and regulates crypto-assets, Turkey aims to demonstrate its dedication to combatting financial crimes linked to these digital currencies.

Turkey’s Roadmap to FATF Compliance – Tightening Crypto Assets Regulation

The international community expects the country to take decisive measures to prevent money laundering and terrorist financing through cryptocurrencies. 

By submitting the proposed legislation to the parliament and swiftly enacting it, Turkey can signal its intent to meet the FATF’s standards in this critical area. Once Turkey implements these changes, the FATF may have no further reasons to keep Turkey on the grey list. 

For context, the G7 group of advanced economies established the Financial Action Task Force (FATF) to safeguard the integrity of the global financial system.

The FATF is pivotal in setting international standards and regulations to combat money laundering, terrorist financing, and other financial crimes. 

Being on the FATF’s grey list signifies that a country is under scrutiny for not meeting these international standards. Such an issue can seriously affect its financial reputation and relationships with other nations. 

Turkey’s commitment to addressing the concerns highlighted by the FATF underscores its dedication to upholding the global financial system’s integrity and security. 

This is particularly evident in its efforts to address issues related to crypto-assets. Furthermore, exiting the grey list will not only improve Turkey’s financial reputation but also be a vital step in ensuring global financial security.

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