Turkey is reportedly in the process of drafting fresh regulations to govern crypto-assets, with the aim of convincing the Financial Action Task Force (FATF), an international organization focused on combating financial crimes, to remove it from the “gray list” of nations that have not done enough to combat money laundering and terrorist financing.
The FATF placed Turkey on its gray list in 2021, and during a discussion with a parliamentary commission on October 31, Turkish Finance Minister Mehmet Simsek highlighted that a recent FATF report had found that Turkey adhered to all but one of the 40 standards set by the organization.
According to Finance Minister Simsek, the sole remaining issue for technical compliance pertains to crypto assets. He mentioned plans to propose a crypto-assets law to parliament, with the goal of exiting the gray list, subject to any political factors. However, specific details regarding the proposed legal changes were not provided.
The FATF, established by G7 advanced economies to safeguard the international financial system, had previously cautioned Turkey in 2019 about significant deficiencies, including the need to improve procedures for freezing assets associated with terrorism and the proliferation of weapons of mass destruction.
Notably, the Turkish Presidential Annual Program for 2024, released on October 25 in the Official Gazette of the Republic of Turkey, sets the objective of finalizing cryptocurrency regulations in the country by the end of 2024. Article 400.5, contained within the comprehensive 500-page document, outlines the intended efforts to establish clear definitions for crypto assets, which may potentially be subject to taxation in the future.
The document also aims to provide a legal definition for crypto asset providers, such as cryptocurrency exchanges. However, it does not offer further specifics about the upcoming regulatory framework. As of December 2022, the Central Bank of the Republic of Turkey had successfully conducted the initial trial of its digital currency, the digital lira, and expressed intentions to continue testing into 2024.
