In a bid to address concerns raised by the Financial Action Task Force (FATF) and secure its position as a significant player in the global crypto market, Turkey is reportedly considering comprehensive regulations for its cryptocurrency sector. The emphasis will be on licensing and taxation, aiming to elevate the country from the FATF’s “grey list.” Turkey currently ranks fourth globally in terms of crypto trading volumes, with approximately $170 billion in transactions over the past year.
Bora Erdamar, a director at the BlockchainIST Center, a prominent blockchain research and development center, highlighted the upcoming crypto regulations. Erdamar stressed the need for specific licensing standards to prevent the abuse of the system. The proposed regulations are expected to cover various aspects, including capital adequacy standards, digital security enhancements, custody services, and the verification of reserves.
Turkey’s inclusion in the FATF’s “grey list” in 2021 highlighted concerns related to money laundering and other financial crimes. To address these issues and enhance its regulatory framework, Turkey is actively considering measures that would align with FATF recommendations and pave the way for its removal from the list.
According to a report from Chainalysis, Turkey holds the fourth position globally in terms of raw crypto transaction volumes, trailing behind the United States, India, and the United Kingdom. Mehmet Türkarslan, the legal director of the Turkish cryptocurrency platform Paribu, stressed the urgency of swift cryptocurrency regulation. Türkarslan emphasized the importance of a regulatory framework that includes licensing for virtual asset service providers, ensuring industry compliance and expeditious removal from the FATF’s “grey list.”
“As the pioneer player of the cryptocurrency industry in Turkey, we shared our expectations and the sector’s necessities from the regulation with the authorized public institutions. We know it is crucial to be delisted from the grey list as soon as possible, so we expect cryptocurrency regulation and a license for the virtual asset service providers with it.”
Countries placed on the FATF’s “grey list” are deemed to lack sufficient safeguards against money laundering and other financial crimes. These nations are mandated to collaborate with the FATF to rectify these deficiencies.
In October, Finance Minister Mehmet Şimşek announced Turkey’s commitment to expediting new legislation for crypto assets, aligning with FATF recommendations and working towards the removal of Turkey from the “grey list.” The regulatory developments underscore Turkey’s proactive approach to cryptocurrency governance, recognizing its impact on investment ratings and global reputation.