Turkey is set to introduce new legislation pertaining to crypto-assets in a bid to strengthen its stance against money laundering and terrorist financing, Reuters reported, citing the country’s Finance Minister Mehmet Simsek.

The move comes as an effort to persuade the Financial Action Task Force (FATF), an international crime watchdog, to elevate the nation from its “grey list” status, which signifies insufficiency in preventive actions against financial malpractices.

Grey list

Turkey was put on the FATF grey list in 2021. The designation places a jurisdiction “under increased monitoring… to address strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing.”

While addressing a parliamentary commission on Oct. 31,  Simsek said that Turkey has been compliant with 39 out of the 40 standards set by the watchdog. He added:

“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.”

However, details regarding the specifics of the impending legal changes remain scant as Simsek refrained from delving deeper into the subject during his address.

Previous concerns

The FATF, which was established by the G7 group of leading global economies with the aim of safeguarding the international financial system, had previously flagged “serious shortcomings” in Turkey’s financial systems in 2019.

The concerns highlighted by FATF included the country’s need to enhance its methods of freezing assets that could potentially be connected to acts of terrorism or the proliferation of weapons of mass destruction.

As Turkey gears up to rectify the gaps in its financial systems, the world will be closely monitoring its actions and its potential exit from the FATF grey list.