Turkey Introduces New Crypto Legislation in Line with Global Standards
Turkey has taken a significant step towards regulating the cryptocurrency market by introducing a new crypto bill. The bill, which was tabled by Abdullah Güler, the Group Chairperson of the ruling AK Party, aims to align the country’s crypto industry with international standards.
The proposed legislation covers various aspects of the crypto sector, including virtual asset service providers (VASPs), trading platforms, asset storage, and transactions conducted by Turkish residents.
Turkey’s decision to draft this bill comes after the government announced its intention to comply with the Financial Action Task Force (FATF) standards by January 2024. Consumer protection and global standards are at the forefront of the country’s crypto regulation priorities.
Under the draft bill, all cryptocurrency service providers operating in Turkey will be required to obtain licenses and register with the Capital Markets Board (CMB), the nation’s financial regulator. The CMB will also be given expanded authority to safeguard consumer assets held by crypto service providers. This is a crucial provision considering Turkey’s status as one of the largest cryptocurrency markets.
Furthermore, the bill addresses the issue of revenue collection by assigning enforcement capabilities to the CMB and the Scientific and Technological Research Council of Türkiye (TÜBITAK).
To promote a locally regulated ecosystem, the bill prohibits foreign crypto brokers from operating in Turkey without obtaining the necessary licenses and complying with the proposed regulations.
The legislation also aims to bring Turkey’s crypto regulations in line with global standards set by the FATF, an international watchdog combating money laundering and terrorist financing. It includes the FATF’s “Travel Rule,” which requires cryptocurrency companies and financial institutions involved in digital asset transactions to collect and share accurate information about the originators and beneficiaries of those transactions.
Turkey’s move to strengthen its crypto regulations follows its placement on the FATF’s “gray list” in October 2021 due to inadequate implementation of Anti-Money Laundering (AML) measures in various sectors, including banking and real estate.
The need for crypto regulation gained urgency in late 2022 as Turkey aimed to protect its national fiat currency, the Turkish lira, from the intrusion of cryptocurrencies. However, opposition from the country’s crypto communities led to a media outcry, prompting the authorities to address their concerns.
Despite President Erdogan’s call to regulate the cryptocurrency industry in December 2022, the introduction of a formal bill was delayed. The leak of a draft crypto bill supported by the ruling AKP party caused public concern over potential restrictive measures. In response, government officials engaged with Turkish crypto communities to address their concerns and develop a more inclusive regulatory framework.
With the introduction of a comprehensive crypto regulatory framework that aligns with FATF guidelines, Turkey aims to balance citizen concerns while promoting a secure and reliable crypto market.
