What Shortcomings Were Identified in Cryptocurrency Companies?

The Financial Action Task Force (FATF), which published its first crypto guide in 2019, stated that Turkish cryptocurrency companies have comprehensive knowledge of their anti-money laundering obligations, but significant shortcomings remain in their implementation.

In its review as part of Turkey’s fifth round of mutual assessment, the FATF noted that crypto asset service providers operating in Turkey generally have a sufficient understanding of money laundering and terrorist financing risks, but that implementation deficiencies persist in some areas.

Compliance Gap in Crypto Companies!

At this point, the FATF assessed that crypto asset service providers (VASPs) generally understood the money laundering risks and the compliance obligations that must be met to mitigate these risks.

However, it was noted that there were some shortcomings in translating the rules into daily practice. Specifically, these shortcomings included the inadequate identification and monitoring of politically influential individuals (PEPs) among customers and the insufficient reporting of suspicious transactions.

FATF also stated during its on-site inspection that Türkiye’s regulatory framework for virtual asset service providers is still in its early stages of implementation.

…”In general, financial institutions and Virtual Asset Service Providers (VASPs) possess comprehensive knowledge of their anti-money laundering and terrorist financing obligations; however, significant deficiencies remain in their effective implementation. In particular, the identification and monitoring of politically influential individuals is only partially effective, and shortcomings in suspicious transaction reporting continue to be identified.”

Statement from the Ministry of Treasury and Finance!

In a statement issued by the Financial Crimes Investigation Board of the Ministry of Treasury and Finance, it was stated that Türkiye was found to be compliant with 38 of the FATF’s 40 recommendations, adding, “These results constitute an important indicator of the level our country has reached and demonstrate that our country is increasingly strengthening its capacity to combat money laundering and terrorist financing through legislative work, institutional arrangements, and practices.”

The ministry also stated that the FATF assessment did not indicate any strategic shortcomings or grey list risks for Türkiye.

*This is not investment advice.