Turkey has recently drafted a comprehensive crypto bill aimed at regulating the cryptocurrency market in line with international standards. The bill covers various aspects of the crypto industry, including virtual asset service providers, trading platforms, asset storage, and transactions conducted by Turkish residents. It prioritizes consumer protection and global standards, with the goal of complying with FATF standards by January 2024. The proposed legislation mandates that all cryptocurrency service providers operating in Turkey must obtain licenses and register with the Capital Markets Board.
The draft bill also grants the CMB expanded authority to safeguard consumer assets held by crypto service providers and addresses the issue of revenue collection by tasking the CMB and TÜBITAK with enforcement capabilities. One of the main provisions of the bill is to foster a locally regulated ecosystem by prohibiting foreign crypto brokers from operating in Turkey without obtaining licenses and adhering to the proposed regulations. It also seeks to align Turkey’s crypto regulations with international standards set by the FATF, incorporating the FATF’s “Travel Rule” which mandates accurate information sharing in digital asset transactions.
Turkey’s decision to strengthen its crypto regulations follows being placed on the FATF gray list in 2021 due to inadequate implementation of AML measures. The move was driven by the government’s ambition to protect the Turkish lira and regulate the crypto space to prevent intrusion from potentially harmful cryptocurrencies. The initiative faced opposition from Turkish crypto communities which led to a delay in introducing formal regulations. In response to public backlash, government officials engaged with various Turkish crypto communities to address concerns and work towards a more inclusive regulatory framework.
With the proposed comprehensive crypto regulatory framework that aligns with FATF guidelines, Turkey aims to balance citizen concerns while fostering a secure and reliable crypto market. The draft legislation emphasizes the importance of consumer protection, compliance with global standards, and the safeguarding of consumer assets. By requiring licenses for all cryptocurrency service providers and prohibiting foreign brokers from operating without meeting regulatory requirements, Turkey seeks to create a locally regulated ecosystem that is aligned with international best practices.
Overall, the introduction of the crypto bill in Turkey signifies a significant step towards regulating the cryptocurrency market in the country. The focus on consumer protection, compliance with global standards, and safeguarding consumer assets demonstrates the government’s commitment to creating a secure and reliable crypto market. By aligning with FATF guidelines and incorporating measures such as the “Travel Rule,” Turkey aims to address concerns around money laundering and terrorist financing in the crypto space while promoting innovation and growth within the industry.
