Turkey’s Financial Crimes Investigation Board (MASAK) just filed a lawsuit against Binance Turkey after the major exchange failed to pass the investigation of the Law on Prevention of Laundering Proceeds, or the AML Law.
According to Ankara-headquartered news Anadolu Agency, MASAK conducted an audit of Law No. 5549 to examine financial documents and KYC reports as well as evidence regarding users’ personal data.
To pass the AML Law’s examination, companies are required to submit an immediate announcement to the authorities if there are any suspicious activities within 10 days.
A Massive Give in The Old East
Operational under the Ministry of Finance and Treasury, MASAK, together with the Financial Action Task Force (FATF) is on the mission to detect money laundering activities and protect people against terrorist financing.
“FATF has asked for measures to be taken against crypto trading platforms,” former Treasury and Cost Minister Lutfi Elvan stated.
MASAK has collected data and identified that Binance Turkey’s crypto-related activities violated the Law of Prevention of Laundering Proceeds. Fine of 8 million Turkish lira, equally $750,000 is imposed on Binance Turkey for breaking the law. The unpleasant event made Binance the first crypto-oriented business to be fined by the Turkish authority.
“The fine imposed on BN Teknoloji was the first of its kind after the authority took on responsibilities to oversee crypto asset service providers in May,” according to Anadolu News.
At the same time, MASAK has agreed to report transactions worth more than 10,000 lira within ten days. This timeline coincides with President Recep Tayyip Erdogan’s announcement that a draft cryptocurrency law has been completed and will be presented to the National Assembly soon.
The new law could boost Turkey’s efforts to bring back the dwindling lira’s value. Erdogan also acknowledged that the recent terrible inflation of the Turkish lira is a national problem that must be addressed. However, perhaps cryptocurrencies will be the option that Turkey is aiming for, in contrast to the declaration of war position on Bitcoin that he made at the end of September.
There is still work to be done as part of Binance. The company needs to be more determined in addressing the legal issues, as it has struggled to establish good relationships with several financial regulators in recent times.
Not a Perfect Game
If the same small mistakes happen, it is very likely that a series of unpleasant events will follow the exchange, which will have a significant impact on future development.
Cryptocurrency is a controversial topic. While supporters believe it will transform global finance, critics are concerned about the risks it poses. And, according to cryptocurrency, money laundering is no laughing matter.
Criminals use money laundering to convert illegal funds into legal funds. Criminals can earn a large amount of “dirty” money through illegal activities, necessitating the need to include them in financial transactions in a decent, public manner. Money is returned to the financial system with a clean record after it has been laundered.
Money laundering has been a headache for authorities in many countries around the world, thanks to the anonymous, borderless, and uncontrollable properties of digital currencies. Currently, tracing the cash flow caused by crime is quite difficult.
The International Monetary Fund (IMF) is concerned about cryptocurrencies like Bitcoin and Ethereum, especially given their rapid growth and regulatory requirements to keep up with them.
Furthermore, the IMF believes that cryptocurrencies could create data gaps, which could “open unwanted doors for money laundering and terrorist financing.”
The IMF’s concerns are understandable, as entering the cryptosphere puts investors at risk due to a lack of knowledge, information, transparency, and oversight.
The International Monetary Fund (IMF) has issued a call for each country’s supervisory authorities to act to establish common global supervision rules to strengthen cross-border surveillance.
Furthermore, because digital currency is a relatively new industry, countries must collaborate to promote data standardization.