Turkey's Cryptocurrency Regulatory Triumph: Clearing the Path to Exit FATF's Gray List

Since 2021, Turkey has been grappling with its inclusion in the "gray list" overseen by the global watchdog focused on combatting money laundering and terror financing, headquartered in Paris. In a significant turn of events, Turkey is now on the cusp of finalizing legislation surrounding cryptocurrencies for submission to its parliament. This crucial development is pivotal for Turkey's bid to extricate itself from the roster of countries designated on the "gray list" by the Financial Action Task Force (FATF), as emphatically stated by Finance Minister Mehmet Şimşek in his address to the nation’s planning and budget commission this past Tuesday.

The "gray list" designation by the FATF is tantamount to a stern admonition, intended to rectify substantial shortcomings in the existing frameworks for combating money laundering and terrorist financing. This classification has cast a shadow on Turkey's economic standing, already strained by heightened inflation rates. Consequently, cryptocurrencies have gained significant momentum, almost being heralded as a potential savior.

Şimşek revealed that Turkey has achieved an impressive compliance with 39 out of 40 FATF standards, with the only remaining focus being on the realm of crypto assets. The meticulous endeavors in this domain have now reached their culmination.

In a recent pronouncement, Turkey’s finance ministry articulated its intention to conduct a comprehensive study encompassing the regulation of crypto asset service providers, as well as the taxation and categorization of virtual assets. However, this latest revelation underscores the nation's resolute commitment to presenting crypto legislation before parliament, marking the definitive stride towards meeting the FATF's technical prerequisites for departing from the "gray list."

“We are prepared to promptly submit a legislative proposal pertaining to crypto-assets to parliament,” affirmed Şimşek.

 “Subsequent to this milestone, there should be no impediment to Turkey's removal from the 'gray list,' unless influenced by extraneous political considerations.”

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