Turkey processes crypto invoices to align with international standards

Last updated: May 17, 2024 5:47 pm EDT | 2 minute read

In a major move, Turkey has drafted a cryptocurrency bill, presented on May 16 by ruling party (AK Party) group chairman Abdullah Güler, to regulate the cryptocurrency market in accordance with international standards.

The legislative proposal covers various aspects of the cryptocurrency industry, including virtual asset service providers (VASPs), trading platforms, asset storage, and transactions conducted by Turkish residents.

Main provisions outlined in Türkiye’s Cryptocurrency Law

Cryptonews reported earlier in the week that Turkey was intention to submit a draft of its crypto regulation, which prioritizes consumer protection and global standards. This happened after the Turkish government announced the upcoming completion of the cryptocurrency regulatory framework to comply with Financial Action Task Force (FATF) standards in January 2024.

According to the draft, all cryptocurrency service providers operating in Turkey must obtain licenses and register with the Capital Markets Board (CMB), the nation’s financial regulator.

The bill also gives the CMB expanded authority to safeguard consumer assets held by crypto service providers. This is quite important as Turkey has grown over the years into one one of the largest markets for cryptocurrency.

Furthermore, the bill addresses the issue of revenue collection by entrusting the CMB and the Türkiye Scientific and Technological Research Council (TÜBITAK) with enforcement capacities.

The draft also highlights the Turkish government’s priority to promote a locally regulated ecosystem by prohibiting foreign cryptocurrency brokers from operating in Turkey without obtaining the necessary licenses and adhering to the proposed regulations.

Notably, the legislation seeks to align Turkey’s crypto regulations with international standards set by the Financial Action Task Force (FATF), a global watchdog that combats money laundering and terrorist financing.

The project incorporates the The FATF “Travel Rule”. which requires cryptocurrency companies and financial institutions involved in digital asset transactions to collect and share accurate information on the originators and beneficiaries of such transactions.

Turkey tightens grip on cryptocurrency market following FATF concerns

Turkey’s move to strengthen its cryptocurrency regulations comes after the Financial Action Task Force (FATF) placed the country on its “grey list” in October 2021 due to inadequate implementation of Anti-money laundering (AML) measures. in various sectors, including banking and real estate.

The government’s need to regulate the cryptocurrency sector became urgent in late 2022, driven by an ambitious plan to curb the intrusion of cryptocurrencies under the pretense of safeguarding the nation’s fiat currency, the Turkish lira.

The initiative, however, met with opposition from Turkey’s crypto communities, prompting a media outcry that later forced the authorities to address their concerns.

Despite President Erdogan’s explicit calls in December 2022 to regulate the cryptocurrency sector, the introduction of a formal bill has been postponed.

The initial catalyst for the backlash was the leak of a draft cryptocurrency law reportedly supported by the Justice and Development Party (AKP), which has sparked outrage on social media platforms due to concerns about potential restrictive measures.

In response to widespread public outcry, government officials, including former AKP deputy ministers and senior bureaucrats from agencies such as the Central Bank and Treasury, convened a meeting at the Parliament in December 2022 to engage with various Turkish crypto communities.

The aim of the dialogue was to address citizens’ concerns and reach agreement on a more inclusive regulatory framework.

Now that Turkish authorities have proposed a comprehensive cryptocurrency regulatory framework in line with Financial Action Task Force (FATF) guidelines, Turkey seeks to balance citizens’ concerns while promoting a safe and reliable cryptocurrency market.

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