Turkey presents crypto asset bill as it seeks watchdog upgrade

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Turkish President Tayyip Erdogan’s ruling party presented a draft law including licensing and registration obligations for crypto asset service providers to parliament on Thursday, as the country aims to improve its status with the Financial Action Task Force (FATF) global financial watchdog.

According to draft regulations submitted by the AK Party, cryptocurrency trading platforms and other companies in the sector would need to obtain licenses from Turkey’s capital markets board.

“The law regulates crypto asset service providers, the activities of crypto asset platforms, storage of crypto assets, and crypto asset buying, selling and transfer transactions that people residing in Turkey can make,” it said.

The FATF downgraded Turkey to its so-called grey list in October 2021 for failing to supervise its banking, real estate and other sectors vulnerable to money laundering and to financing groups that are on the United Nations’ sanctions list.

Countries on the grey list undergo increased monitoring and must actively work with FATF to correct deficiencies.

The regulations include requirements and liabilities for platform management, the range of services platforms can provide and financial and operational standards, according to the draft law.

Ankara has been working on legislation covering crypto assets for more than two years to regulate the sector and eliminate risks, especially after some smaller trading platforms went bankrupt, leaving thousands without access to their funds.

The draft law also said the Capital Markets Board will have the authority to bring about secondary regulations, establish regulatory procedures for the crypto asset service providers and transactions.

Earlier this month, sources told Reuters that a team from the FATF met with Turkish authorities ahead of its highly-anticipated report on the country in June, when the government has said it expects the FATF will upgrade Turkey.

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