Turkey, currently ranking fourth globally in crypto trading, is contemplating significant regulatory changes in its crypto market. The focus of these regulations lies in licensing and taxation, aiming to propel the country out of the Financial Action Task Force’s (FATF) “grey list.”
Prioritizing Licensing Standards for System Integrity
Bora Erdamar, Director of BlockchainIST Center, highlighted the impending regulations’ emphasis on specific licensing standards. This strategic move aims to curb potential system abuse, contributing to a more secure and compliant crypto ecosystem.
In a recent Reuters report, Erdamar disclosed that the regulatory framework might encompass various aspects. These include capital adequacy standards, digital security enhancements, custody services, and verification of reserves. The comprehensive approach reflects Turkey’s commitment to addressing the intricacies of the crypto market.
Addressing FATF Concerns for Global Recognition
Turkey’s inclusion in FATF’s “grey list” in 2021 raised concerns about money laundering and financial crimes. The proposed regulations align with Turkey’s ambition to swiftly respond to FATF’s recommendations, signaling a proactive approach to global financial standards.
Chainalysis, a blockchain analytics firm, reported Turkey as the fourth-largest player globally in raw crypto transaction volumes. With approximately $170 billion in transactions over the last year, Turkey follows the United States, India, and the United Kingdom. This underlines the significance of regulatory reforms for sustained growth and global competitiveness.
Industry Voices Stress Urgency
Mehmet Türkarslan, the legal director of Turkish cryptocurrency platform Paribu, emphasized the urgency of cryptocurrency regulation. As a pioneer player in the industry, Türkarslan stressed the need for a regulatory framework, including licensing for virtual asset service providers. The objective is clear—to ensure industry compliance and prompt removal from the FATF’s “grey list.”
Türkarslan shared insights, stating:
“We, as the pioneer player of the cryptocurrency industry in Turkey, 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 a cryptocurrency regulation and a license for the virtual asset service providers with it.”
Addressing Deficiencies and Enhancing Global Reputation
Countries on the FATF’s “grey list” are tasked with collaborating to rectify deficiencies in combating money laundering and financial crimes. Finance Minister Mehmet Şimşek announced in October that Ankara would expedite introducing new legislation for crypto assets.
Ultimately, the objective is to fulfill the remaining FATF recommendations, aiming to elevate Turkey’s global standing and mitigate potential impacts on investment ratings and reputation.
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