April 19, 2024
Turkey's Regulatory Overhaul
Latest Cryptocurrency News

Turkey Drafts Crypto Regulations in Bid to Exit FATF ‘Grey List’

Turkey is allegedly in the process of formulating new guidelines to regulate cryptocurrency assets as part of an endeavor to persuade the Financial Action Task Force (FATF), an international entity dedicated to combating financial crimes, to remove the country from the grey list of nations perceived as not adequately combating money laundering and terrorist financing.

Initially placed on the grey list by the FATF in 2021, Turkey reportedly adhered to nearly all of the 40 standards established by the FATF, with the exception of one issue, as revealed during a discussion with a parliamentary commission on October 31 by Turkish Finance Minister Mehmet Simsek. Simsek mentioned plans to propose legislation concerning crypto assets to the parliament with the goal of exiting the grey list, although specific legal alterations were not explicitly outlined.

The FATF, established by the Group of Seven (G7) advanced economies to protect the global financial system, had previously cautioned Turkey in 2019 regarding significant deficiencies in asset freezing procedures associated with terrorism and the proliferation of weapons of mass destruction. Turkey’s Presidential Annual Program for 2024, disclosed on October 25 in the Official Gazette of the Republic of Turkey, aims to finalize cryptocurrency regulations in the country by the end of 2024. Article 400.5 within the extensive 500-page document outlines intentions to create precise definitions for crypto assets, potentially subjecting them to future taxation.

The document also aims to provide legal definitions for crypto asset providers such as cryptocurrency exchanges, although it lacks specific details regarding the forthcoming regulatory framework. By December 2022, the Central Bank of the Republic of Turkey had conducted an initial trial of its central bank digital currency, the digital lira, and expressed plans to continue testing through 2024.

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