Turkey’s New Crypto Policies Address FATF Concerns: Report

• Turkey has launched new crypto regulatory policies focusing on licensing and taxation.
• The introduction of a new regulatory system is the country’s strategic move to get off FATF’s “grey list.”
• The policy will also address capital requirements, digital security measures, custody services, and proof of reserves.

Turkey, the fourth largest country in crypto trading, has introduced new crypto regulation policies focusing on licensing and taxation. The country is taking this step to regulate cryptocurrencies to get off the Financial Action Task Force’s (FATF) “grey list.”

Bora Erdamar, Director at BlockchainIST Center, a research and development center for blockchain technology, acknowledged the necessity of new regulatory norms in Turkey’s crypto markets to “prevent abuse of the system.” He asserted, 

Introducing certain licensing standards will be one of the top priorities in the new regulation.

Erdamar added that the country has also proposed to launch regulatory policies to address capital requirements, digital security measures, and custody services, among other issues.

Mucahit Donmez, Binance Turkey’s chief executive, flagged the “lack of regulation” in the country, citing the increasing interest in cryptocurrencies. He stressed the sectors that need more regulation, stating, “We think that ensuring the security of users’ assets and setting up certain criteria in terms of minimum capital requirements, listings and custody, and requirements for platforms to obtain operation licenses will contribute positively to the sector.”

As per Chainalyis’ report, Turkey is placed in the fourth position in raw crypto transaction volumes, accounting for $170 billion last year, following the U.S., India, and the U.K. In addition, the Global Crypto Adoption Index 2023 by Chainalysis ranked Turkey as the ninth largest country in crypto adoption. 

However, the international financial watchdog FATF incorporated Turkey, along with the United Arab Emirates, South Africa, and other 20+ nations, pointing out their vulnerability to money laundering and implementing scrutiny over them.