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In a significant development, Turkey has drafted a cryptocurrency bill, presented by the ruling party (AK Party) Group Chairperson Abdullah Güler on May 16, aimed at regulating the cryptocurrency market in line with international norms.
The proposed legislation encompasses various elements of the crypto sector, including virtual asset service providers (VASPs), trading platforms, asset custody, and transactions carried out by Turkish citizens.
Key Provisions Highlighted in Turkey’s Crypto Bill
Cryptonews reported earlier this week that Turkey was preparing to submit a draft of its crypto regulations, which emphasizes consumer protection and adherence to global standards. This announcement followed the Turkish government’s indication of nearing completion of the crypto regulatory framework to align with the Financial Action Task Force (FATF) standards by January 2024.
The draft stipulates that all cryptocurrency service providers operating within Turkey must secure licenses and register with the Capital Markets Board (CMB), the country’s financial regulatory authority.
Turkish #crypto bill: 5 things to know before it’s introduced :
Turkey was anticipated to unveil crypto legislation in early 2024, but the local parliament has yet to provide updates on the process.Turkey already has some “light” crypto regulations
While the Turkish government has yet to… pic.twitter.com/q37Qb7bsiC— TOBTC (@_TOBTC) May 6, 2024
The bill also empowers the CMB with enhanced authority to protect consumer assets held by crypto service providers. This is particularly significant as Turkey has developed into one of the largest markets for cryptocurrency over the years.
Furthermore, the bill tackles the issue of revenue collection by assigning enforcement responsibilities to the CMB and the Scientific and Technological Research Council of Türkiye (TÜBITAK).
The draft also underscores the Turkish government’s commitment to nurturing a locally regulated ecosystem by prohibiting foreign crypto brokers from operating in Turkey without the requisite licenses and compliance with the proposed regulations.
Importantly, the legislation aims to align Turkey’s crypto regulations with international standards established by the Financial Action Task Force (FATF), a global authority focused on combating money laundering and terrorist financing.
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The draft includes the FATF’s “Travel Rule,” which requires that cryptocurrency firms and financial institutions engaged in digital asset transactions gather and share precise information regarding the originators and beneficiaries of those transactions.
Turkey Reinforces Control Over Crypto Market Following FATF Concerns
Turkey’s initiative to enhance its crypto regulations follows the Financial Action Task Force (FATF) placing the country on its “gray list” in October 2021 due to insufficient implementation of Anti-Money Laundering (AML) measures across various sectors, including banking and real estate.
The government’s urgency to regulate the crypto sector intensified in late 2022, propelled by a proactive strategy to mitigate the influence of cryptocurrencies while aiming to protect the national fiat currency, the Turkish lira.
This initiative encountered resistance from Turkey’s crypto communities, resulting in a media backlash that ultimately prompted the authorities to respond to their concerns.
Despite President Erdogan’s public calls in December 2022 for regulating the cryptocurrency sector, the introduction of a formal bill was delayed.
The initial trigger for the backlash was the leak of a draft crypto bill allegedly supported by the ruling Justice and Development Party (AKP), which incited outrage on social media due to fears of potential restrictive measures.
In reaction to the widespread public discontent, government officials, including former deputy ministers from the AKP and senior bureaucrats from agencies such as the Central Bank and Treasury, held a meeting at the Parliament in December 2022 to engage with various Turkish crypto communities.
The discussion aimed to address public concerns and reach a consensus on a more inclusive regulatory framework.
With Turkish authorities now proposing a comprehensive crypto regulatory framework that aligns with Financial Action Task Force (FATF) guidelines, Turkey aims to balance citizen concerns while promoting a secure and trustworthy crypto market.
The post Turkey Drafts Crypto Bills To Align With International Standards appeared first on Cryptonews.
