Turkey Plans Fresh Crypto Legislation to Ease FATF Concerns

• The Turkish Finance minister announces plans to introduce new crypto legislation. 
• He says the new law will address money laundering and terror financing concerns. 
• The new legislation will help remove Turkey from the FATF “grey list”.

The Turkish Finance Minister, Mehmet Simsek, on Tuesday said the country plans to introduce fresh crypto-assets legislation to improve its standing before the Financial Action Task Force (FATF). The FATF had, in 2021, added Turkey to the “grey list” for failing to address concerns about money laundering and terror financing.  

The planned crypto legislation will address concerns that the FATF had outlined in its 2021 report. The report cited weaknesses in addressing money laundering and terror financing under existing Turkish laws. The Minister said that the planned crypto legislation is part of a slew of legislative changes to address FATF’s 40-point compliance guideline. 

Turkey’s downgrade to the FATF grey list acted as an inhibitor for foreign investment flowing into the country. With the country already struggling with double-digit inflation and rampant unemployment, the greylisting hindered the country’s efforts to turn the economy around. According to IMF estimates, the FATF grey listing reduces capital inflows by about 7.6% of GDP, with foreign investment also taking significant hits. 

Mehmet said that new legislation covering crypto assets will address all of the 40-point FATF checklist and will help pull Turkey out of the grey list. He adds, 

We will submit a law proposal on crypto-assets to the parliament as soon as possible. After that, there will be no reason for Turkey to stay in that grey list, if there are no other political considerations.

Turkey also has a new crypto framework in the works that will look to define and tax crypto-assets as well as regulate exchanges and other service providers. 
The Paris-based FATF is a financial watchdog set up by the G7 nations. According to reports, the watchdog in 2019 warned Turkey of its serious shortcomings in freezing assets linked to money laundering and terror financing.