Turkey Aims to Introduce Dedicated Digital Asset Laws to Address FATF Concerns
Turkey’s finance minister, Mehmet Simsek, has disclosed plans to implement specific regulations for digital assets in an effort to remove the country from the Financial Action Task Force’s (FATF) grey list. Simsek stated that the absence of a dedicated legal framework for digital assets in Turkey is the remaining area of non-compliance highlighted by the FATF. The finance minister further emphasized that submitting a law proposal on crypto-assets to the parliament would help Turkey eliminate the need to stay on the grey list. FATF is an intergovernmental organization dedicated to combatting money laundering and terrorist financing, using the grey list to monitor and address deficiencies in anti-money laundering and counter-terrorism financing controls in various jurisdictions.
Inclusion on the FATF grey list can have significant repercussions for countries. Studies have shown that grey list countries experience a 2% reduction in foreign direct investment to GDP and up to a 10% decrease in incoming payments. Turkey was added to the FATF grey list in 2021 due to serious shortcomings in freezing assets linked to terrorism. While Turkey has made progress in addressing concerns raised by the FATF, the organization pointed out that the regulation of digital assets remains insufficient. Notably, licensing requirements for exchanges and other digital asset service providers are absent in Turkey, and there are no requirements for these entities to identify and mitigate anti-money laundering and counter-terrorism financing risks.
The importance of regulating digital assets in the fight against money laundering and terrorist financing has been increasingly highlighted. Binance, for instance, has faced scrutiny for allegedly facilitating transactions involving Hamas and Iran, both under international sanctions. This scrutiny has intensified since the outbreak of the Israel-Gaza war. The situation in Turkey serves as a reminder that digital asset regulation is not only crucial for the credibility of the industry but also essential in combating money laundering and terrorist financing on an international scale. International expectations require countries embracing digital assets to address these risks, as failure to do so can result in real economic consequences.
### News source: coingeek.com