On May 16, the Turkish ruling party submitted a draft cryptocurrency bill to the parliament, with a focus on licensing and registration for crypto service providers. The bill aims to align with international standards and comprehensively govern the cryptocurrency market.
According to a Reuters report, the draft bill seeks to update existing laws and regulate the cryptocurrency market in a comprehensive manner. It places emphasis on consumer protection, platform transparency, and compliance with financial regulations.
The proposed legislation intends to regulate cryptocurrency trading platforms and other service providers in the sector. It mandates that these entities 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, and crypto asset buying, selling, and transfer transactions by Turkish residents. It also addresses the classification of cryptocurrencies and projects, ensuring compliance with existing financial regulations. Key takeaways from the bill include:
1. Crypto service providers must be licensed and regulated by the Capital Markets Board.
2. Enhanced oversight by the CMB to protect consumer assets and facilitate effective dispute resolution.
3. Mandatory revenue collection from crypto service providers by the CMB and the Scientific and Technological Research Council of Turkey.
4. Ban on foreign crypto brokers to promote a locally regulated ecosystem.
This move aims to align Turkey with international standards and address concerns raised by the Financial Action Task Force (FATF), thereby 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 requires cryptocurrency companies and financial institutions involved in digital asset sales, collectively known as virtual asset service providers (VASPs), to obtain and share accurate originator and beneficiary information with counterparties or other financial institutions before or during transactions.
In October 2021, Turkey was demoted to the “gray list” by the FATF due to its failure to implement Anti-Money Laundering measures in various sectors, including banking and real estate. Countries on the gray list are required to actively cooperate in rectifying any shortcomings and face increased scrutiny.
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