Turkey Warns Financial Innovation Opens New Risks for Illicit Use

(MENAFN) Türkiye’s Treasury and Finance Minister has warned that rapid developments in financial technology are creating new vulnerabilities that can be exploited by criminals and terrorist financiers, describing financial innovation as a “double-edged sword,” according to reports.

Speaking at the 5th “No Money For Terror” ministerial conference in Paris, the minister Mehmet Şimşek participated in a panel focused on preventing the misuse of financial technologies for terrorism financing.

According to reports, he said modern payment systems are making transactions faster, cheaper, and more accessible, but are also opening new pathways for illicit financial activity.

“Crypto-assets are now at the center of this new risk landscape. Transactions are executed in seconds, cross borders without friction, and provide access to global liquidity with a single click,” he said, as posted on Turkish social media platform NSosyal.

He added that some of these tools allow users to conceal their identities, increasing their appeal for illicit actors.

According to Şimşek, the Financial Action Task Force (FATF) has found that stablecoins are increasingly being used by those involved in terrorism financing because they maintain value, move quickly across borders, and are easy to access.

“They preserve value, move instantly across borders, and are easy to access, which is exactly why they are being exploited,” he said.

He also emphasized that global FATF standards need consistent enforcement across all jurisdictions, warning that weak regulatory gaps can be exploited by criminals.

Şimşek said Türkiye has already taken early steps to address risks linked to crypto assets and anti-money laundering frameworks.

“In 2021, we brought VASPs [Virtual asset service providers] under AML/CFT obligations, implemented the travel rule, and introduced licensing and compliance requirements,” he said.

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