Turkey Aims to Leave FATF Grey List with Proposed Crypto Asset Legislation

1698860689-turkish-flag-3 — Source: Adobe / Husamex

Turkey is taking steps to toughen its crypto regulations in an effort to convince the Financial Action Task Force (FATF), an international financial crime watchdog, to remove it from the “grey list” of countries that have not done enough to combat money laundering and terrorist financing.

In a recent address to a parliamentary commission, Turkish Finance Minister Mehmet Simsek said that a new FATF report had found Turkey to be fully compliant with 39 out of the 40 standards set by the watchdog, with the only remaining concern being related to crypto assets, Reuters reported on Wednesday.

To address this issue, Simsek announced that Turkey would be submitting a proposal for new legislation pertaining to crypto-assets to the parliament in the near future.

He mentioned that once this legislation is in place, there would be no reason for Turkey to remain on the grey list, provided there are no other political considerations.

The exact details of the proposed legal changes were not provided in the statement.

The FATF had previously cautioned Turkey about “serious shortcomings,” including the need to enhance measures to freeze assets connected to terrorism and the proliferation of weapons of mass destruction in 2019.

The agency added Turkey to its grey list in 2021.

The Financial Action Task Force was founded in 1989 by the G7 nations and works to develop policies to prevent money laundering and terrorist financing around the world.

Ongoing work to regulate crypto in Turkey

Turkey has recently taken several steps to bring crypto under the control of regulators in the country.

Just last month, news broke that Turkey’s Presidential Annual Program for 2024 included plans to establish a regulatory framework for crypto assets, including plans to tax these assets, starting 2024.

Turkey saw an inflow of crypto investors in August as the country has been struggling with soaring inflation.

According to a survey by crypto exchange KuCoin from earlier this year, over half of the Turkish population has turned to cryptos as a safeguard against inflation.