November 13, 2023

Veriscope Regulatory Recap - 31st October to 13th November

Veriscope Regulatory Recap - 31st October to 13th November

Welcome to our latest Veriscope Regulatory Recap. In this edition, we dive into Turkey's planned crypto regulations aimed at exiting the FATF grey list, the UK's focus on stablecoins, New York's task force on digital currencies, and the SEC's call for clearer crypto rules. Let's dive in!

Emerging Global Trends in Crypto Regulation

The landscape of cryptocurrency regulation is undergoing significant changes worldwide, with countries and regulatory bodies adapting to the evolving digital asset market.

Turkey's Regulatory Push: Turkey is moving towards introducing new legislation for crypto-assets. This step is aimed at strengthening anti-money laundering and counter-terrorist financing efforts. The nation's goal is to exit the Financial Action Task Force's (FATF) "grey list," indicating its commitment to addressing strategic deficiencies in its financial systems.

UK's Stablecoin Focus: In the UK, the Financial Conduct Authority (FCA) and the Bank of England are seeking public feedback on their approach to regulating stablecoins. They aim to balance the potential benefits of stablecoins for faster, cheaper payments with the need to protect consumers and maintain financial stability.

Image Source

New York's Exploratory Task Force: New York is proposing a task force to study the impacts of digital currency and blockchain industries. This initiative aims to guide the state in addressing the challenges and harnessing the opportunities presented by these emerging technologies.

SEC's Call for Clearer Crypto Rules: At the SEC Regulation Outside the United States conference, Commissioner Mart Uyeda stressed the importance of providing definitive rules and guidance for the cryptocurrency market rather than relying solely on enforcement actions. This stance highlights the ongoing debate over the classification and regulation of digital assets as securities.

These developments signify a global trend towards more structured and comprehensive regulatory frameworks for cryptocurrencies. As nations and regulatory bodies navigate this complex and dynamic field, the focus should remain on ensuring consumer protection, market integrity, and fostering responsible innovation within the digital asset ecosystem.

Turkish Government Proposes New Crypto Laws to Address FATF Compliance Gaps

Turkey is on a mission to revamp its stance on cryptocurrency regulation in a bid to shake off the Financial Action Task Force's (FATF) "grey list" label, a designation underscoring the country's previous shortcomings in anti-money laundering (AML) and counter-terrorist financing (CTF) practices. 

Recognizing the importance of addressing these critical areas, Finance Minister Mehmet Simsek has announced imminent legislative proposals targeting the crypto sector, marking a significant step towards aligning with 39 of the 40 FATF standards.

Impact on the Crypto Ecosystem

Turkey's push to strengthen AML and CTF regulations in the crypto sector could greatly enhance investor confidence, making the market safer and more attractive for investment. Additionally, aligning with FATF standards may ease Turkey's integration into the global crypto economy, allowing for smoother international crypto transactions and partnerships.

On the flip side, the upcoming legislative changes could also bring a wave of uncertainty for crypto businesses operating in Turkey, as the specifics remain unclear. This could create challenges in compliance and strategic planning. Furthermore, the new laws might impose rigorous compliance requirements on crypto entities, potentially stifling innovation and adding to operational costs.

Overall, as Turkey advances toward legal reform, the global financial and crypto communities remain watchful. The outcome of these regulations will not only influence Turkey's financial standing but also set a precedent for how emerging markets should navigate the intricate balance between innovation and regulatory compliance in the digital asset space.

New York State Senate Pushes for Crypto Task Force

In a significant move, New York State Senate Banking Committee Chair James Sanders is advocating for a proactive approach towards digital currency, cryptocurrency, and blockchain industries. Sanders proposes a 16-member task force, appointed by the governor and the Legislature, to comprehensively study these sectors. This includes examining their impacts on state tax revenues, energy consumption, and the environmental implications of digital mining.

Mike Lomas of the Financial Guys supports minimal regulation in general but suggests more oversight in the crypto sphere, especially for currencies not traded on public exchanges. Drawing parallels with the dot-com bubble, Lomas advocates for federal rather than state-level regulation, emphasizing the importance of safeguarding investments and banking stability.

Positive Aspects:

New York's approach, characterized by forward-thinking, can catalyze enhanced comprehension and regulation of digital currencies. This initiative positions New York potentially as a frontrunner in the evolving crypto industry. With its balanced perspective, the Task Force strives to marry regulatory needs with the acknowledgment of the burgeoning industry’s potential, thereby nurturing responsible growth within this domain

Negative Aspects:

However, the path toward new regulations may breed uncertainty among crypto businesses and investors. This could translate into a temporary deceleration in market dynamics within New York. Additionally, there lies a risk of potential overregulation. 

An overly cautious regulatory approach could echo the apprehensions reminiscent of the dot-com era, inadvertently stifling innovation in the crypto sector. Such a scenario might prompt crypto businesses to migrate to jurisdictions with more accommodating regulatory landscapes.

Interesting Reads

Five Must-Have Attributes for Your Travel Rule Solution

Decoding FATF Travel Rule Solution Pricing: Your Ultimate Guide to Compliance Costs


VASPs need a Travel Rule Solution to comply with the FATF Travel Rule. Have you zeroed in on it yet? Check out Veriscope, the only frictionless crypto Travel Rule compliance solution. 

Visit our website to read more, and contact our team for a discussion.

Follow us on X (Formerly Twitter), LinkedIn, Telegram, and Medium for up-to-date news from the world of crypto regulations.  To keep up-to-date on all things crypto regulations, sign up for our newsletter.