The post Turkey’s New Crypto Bill Aims to Enhance FATF Compliance appeared first on Coinpedia Fintech News
On May 16, the Turkish ruling party submitted a draft crypto bill to the parliament. The bill focuses on licensing and registration for crypto service providers, aiming to align with international standards and improve Turkey’s standing with the Financial Action Task Force (FATF), the global watchdog for money laundering and terrorist financing.
Turkey’s Efforts to Improve FATF Footing
Turkey was downgraded to the FATF gray list in October 2021 due to its failure to implement adequate anti-money laundering measures in banking, real estate, and other sectors vulnerable to money laundering. Countries on the gray list must actively cooperate in correcting deficiencies and are subjected to heightened scrutiny.
Legislation to Regulate Crypto Service Providers
The proposed legislation intends to regulate crypto trading platforms and other service providers in the sector, requiring them to obtain licensing from Turkey’s Capital Markets Board (CMB). The CMB will be authorized to create secondary regulations and establish guidelines for crypto asset service providers and transactions.
Need for Tighter Crypto Regulation
The draft also emphasizes the need for tighter crypto regulation to mitigate risks, particularly given recent bankruptcies of smaller trading platforms. Turkey’s capital, Ankara, has been working on developing crypto legislation for over two years.
According to a report from Reuters, the bill aims to update existing laws and comprehensively govern the crypto market. It covers all aspects of governing crypto asset service providers, crypto asset platform operations, crypto asset storage, and crypto asset buying, selling, and transfer transactions by Turkish residents. Key focus areas include consumer protection, platform transparency, and compliance with financial regulations.
Inclusion of FATF Travel Guidelines
The proposed legislation also includes the FATF-issued travel guidelines. These guidelines require crypto companies and financial institutions involved in digital asset sales, collectively known as Virtual Asset Service Providers (VASPs), to obtain and share accurate originator and beneficiary information with counterparty VASPs or other financial institutions before or during transactions.
Earlier, sources informed Reuters of a meeting between the FATF team and Turkish officials ahead of its highly anticipated report in June. The government hopes for an upgrade from the FATF following the implementation of the new regulations.
In summary, Turkey’s draft crypto bill aims to enhance its regulatory framework and align with international standards to improve its standing with the FATF. The bill’s focus on licensing, regulation, and adherence to FATF guidelines reflects the country’s commitment to mitigating risks and promoting transparency in the crypto sector.
