Forbes India 15th Anniversary Special

Turkey pursues new crypto regulations to exit FATF's grey list

Turkey, with just 1 FATF standard left to fulfil, aims to draft new crypto regulations to exit the FATF grey list that it was downgraded to in 2021

Shashank Bhardwaj
Published: Nov 4, 2023 06:42:42 AM IST
Updated: Nov 4, 2023 12:20:53 PM IST

Turkey pursues new crypto regulations to exit FATF's grey listImage: Shutterstock

Turkey is reportedly working on new crypto regulations to persuade the Financial Action Task Force (FATF) to remove it from the “grey list” of countries that have taken insufficient action to combat money laundering and terrorist financing.

The FATF is an international organisation comprising advanced economies dedicated to safeguarding the global financial system. It operates based on international standards known as the FATF recommendations, which provide a comprehensive framework of measures countries must adopt to combat money laundering and terrorism financing.

Inclusion in the FATF grey list affects a country’s relationship with foreign banks and investors who follow FATF rankings. It puts them under increased scrutiny from the FATF and its member states. However, the FATF also offers technical support to help countries on the grey list enhance their Anti-money laundering (AML) and counter-terrorist financing (CFT) systems.

In 2019, the FATF warned Turkey about “serious shortcomings” in its procedures for freezing assets related to terrorism and the proliferation of mass destruction weapons. In 2021, the FATF downgraded Turkey to the grey list, placing it alongside Pakistan, Morocco, Albania, and Yemen.

During a discussion with a parliamentary commission on Oct 31, 2023, Turkish Finance Minister Mehmet Simsek revealed that according to a FATF report, Turkey has adhered to all but one of the 40 standards set by the organisation.

Simsek explained, “The only remaining issue within the scope of technical compliance is the work related to crypto assets. 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’s new crypto regulations will have a significant impact on the country’s crypto industry. The regulations will make it difficult for criminals to use cryptos for money laundering and terrorist financing. Additionally, these regulations will also make it easier for the government to track the flow of cryptos in the country.

By removing itself from the FATF grey list, Turkey will attract more foreign investment and improve its access to global financial markets. As Turkey prepares to address gaps in its financial systems, the world closely monitors its potential exit from the FATF grey list.

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash

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