On May 16, Türkiye’s ruling party submitted a draft encryption bill to parliament, aimed at regulating and licensing encryption service providers in line with international standards. The bill seeks to update existing laws governing the cryptocurrency market, with a focus on consumer protection, platform transparency, and compliance with financial regulations, as reported by Reuters.
The proposed legislation targets cryptocurrency trading platforms and other service providers within the industry, mandating that they obtain licenses from Türkiye’s Capital Markets Board (CMB). It aims to regulate various aspects of crypto-asset operations, including storage, purchase, sale, and transfer transactions by Turkish residents. Additionally, the bill addresses the classification of cryptocurrencies and projects, ensuring adherence to existing financial regulations.
Key provisions of the bill include the requirement for cryptocurrency service providers to be licensed and regulated by the Capital Markets Commission, as well as the strengthening of CMB regulations to safeguard consumer assets and facilitate effective dispute resolution. Furthermore, the bill mandates revenue collection from encryption service providers, overseen jointly by the CMB and Türkiye’s Scientific and Technological Research Council.
To foster a locally regulated ecosystem, the draft law proposes a ban on foreign cryptocurrency brokers. This initiative aims to align Türkiye with international standards and address concerns raised by the Financial Action Task Force (FATF). By incorporating FATF travel guidance, the bill seeks to enhance the security and reliability of the country’s cryptocurrency market.
Türkiye's inclusion in the FATF's "grey list" in October 2021 highlighted deficiencies in anti-money laundering measures across various industries, including banking and real estate. Countries on the grey list are required to actively cooperate to rectify these deficiencies and undergo closer scrutiny by the FATF. The proposed encryption bill represents a concerted effort by Türkiye to meet FATF requirements and strengthen its regulatory framework for cryptocurrencies.
