The ruling party in Turkey has presented a draft bill to the parliament regarding cryptocurrencies on May 16th. The main objective of the bill is to establish licensing and registration requirements for crypto service providers, while also aligning with international standards.
According to a report by Reuters, the draft bill aims to comprehensively regulate the cryptocurrency market by updating existing laws. The bill primarily focuses on areas such as consumer protection, platform transparency, and compliance with financial regulations.
The proposed legislation seeks to regulate cryptocurrency trading platforms and other service providers in the sector, mandating that they obtain licenses from Turkey’s Capital Markets Board (CMB).
The draft law aims to govern various aspects of the crypto industry, including crypto asset service providers, crypto asset platform operations, crypto asset storage, as well as crypto asset buying, selling, and transfer transactions carried out by Turkish residents. Additionally, the legislation addresses the classification of cryptocurrencies and projects, ensuring compliance with existing financial regulations. Here are some key points from the bill:
1. Crypto service providers must obtain licenses and adhere to regulations set by the Capital Markets Board.
2. The CMB will have enhanced oversight to safeguard consumer assets and ensure effective dispute resolution.
3. Crypto service providers will be required to contribute revenue to both the CMB and the Scientific and Technological Research Council of Turkey.
4. Foreign crypto brokers will be prohibited to encourage the development of a locally regulated ecosystem.
This move aims to bring Turkey in line with international standards and address concerns raised by the Financial Action Task Force (FATF), ultimately enhancing the security and reliability of the national crypto market.
The draft law also proposes the inclusion of the FATF-issued travel guidelines. The FATF Travel Rule mandates that cryptocurrency companies and financial institutions involved in digital asset sales, collectively known as virtual asset service providers (VASPs), obtain and share “accurate originator information and beneficiary information” with counterparty VASPs or other financial institutions before or during transactions.
Turkey was downgraded to the “gray list” by the FATF in October 2021 due to its failure to implement Anti-Money Laundering measures in various sectors such as banking and real estate. Countries on the gray list are required to actively cooperate in rectifying any shortcomings and are subjected to increased scrutiny.
In summary, Turkey’s ruling party has introduced a draft bill that aims to regulate the cryptocurrency market by implementing licensing requirements and aligning with international standards. The bill focuses on consumer protection, platform transparency, and compliance with financial regulations, while also addressing concerns raised by the FATF.