Crypto Updates

Turkey aims to shed FATF gray list status with new crypto regulations

Turkey aims to shed FATF gray list status with new crypto regulations

Turkey is reportedly drafting fresh regulations to govern crypto-assets in an effort to convince the Financial Action Task Force (FATF), an international organization responsible for combating financial crimes, to remove it from a “gray list” of nations that have not done enough to combat money laundering and terrorist financing.

Notably, the FATF placed Turkey on its gray list in 2021. According to a report, during a discussion with a parliamentary commission on Oct. 31, Turkish Finance Minister Mehmet Simsek mentioned that a FATF report determined that Turkey adhered to all but one of the 40 standards set by the watchdog.

Finance Minister Simsek reportedly stated that the sole outstanding matter for technical compliance is related to crypto assets. He cited plans to propose a crypto-assets law to parliament, aiming to exit the gray list, pending any political factors. No specifics on the legal changes were provided.

The FATF, established by the G7 advanced economies to safeguard the international financial system, cautioned Turkey in 2019 about significant deficiencies. These included the necessity to enhance procedures for freezing assets associated with terrorism and the proliferation of weapons of mass destruction.

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Nevertheless, the Turkish Presidential Annual Program for 2024, released on Oct. 25 in the Official Gazette of the Republic of Turkey, sets the objective of completing cryptocurrency regulations in the country by the end of 2024. Article 400.5, found within the comprehensive 500-page document, outlines the intended efforts to establish clear definitions for crypto assets, potentially subject to taxation in the future.

The document also intends to legally define crypto asset providers like cryptocurrency exchanges. However, it does not provide further specifics on the upcoming regulatory framework. By December 2022, the Central Bank of the Republic of Turkey had successfully conducted the initial trial of its digital currency, the digital lira. It has expressed intentions to pursue further testing into 2024.

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