COMMUNIQUÉS ON CRYPTO ASSET SERVICE PROVIDERS HAVE BEEN PUBLISHED

COMMUNIQUÉ NO. III-35/B.1

What Regulations Have Been Introduced Under the Communiqué?

Regulations on the Establishment Requirements and Licensing of Crypto Asset Service Providers Have Been Introduced.

With Communiqué No. III-35/B.1, it has been made mandatory for crypto asset service providers to be established as joint-stock companies, with their shares being registered and issued in exchange for cash. Additionally, their minimum capital must not be below the threshold determined by the Board, and the entire amount must be fully paid in cash. Furthermore, their articles of association must comply with the applicable legislation, their business activities must be limited to authorized services, their founders must meet the required qualifications, and their ownership structure must be transparent.

Regarding founders and shareholders, financial and legal restrictions have been imposed, including the absence of bankruptcy, concordat, or liquidation history, compliance with specific shareholding and control limitations in financial sectors, and the requirement that they must not have been convicted of crimes such as embezzlement, fraud, bribery, forgery, or the financing of terrorism.

Board Approval Is Required for Crypto Asset Service Providers to Start Operations, and New Regulations Have Been Introduced in This Context.

Crypto asset service providers must obtain approval from the Board before commencing operations. To obtain this approval, they must maintain compliance with the establishment requirements, have fully paid the minimum capital in cash, fulfill capital adequacy obligations, establish an appropriate organizational structure, meet the requirements for personnel and executives, implement a security infrastructure in compliance with TÜBİTAK criteria and ensure its functionality, set up internal audit, control, and risk management systems, complete system integration tests with the Central Registry Agency (CRA), and establish an infrastructure ensuring the secure storage of private keys. Additionally, the Board may impose additional requirements on a case-by-case basis if deemed necessary.

Obligations Regarding Share Transfers and Registration of Crypto Asset Service Providers Have Been Regulated

With Communiqué No. III-35/B.1, it has been stipulated that changes in the shareholding structure of crypto asset service providers reaching or exceeding certain thresholds shall be subject to Board approval. Prior approval from the Board is mandatory for share transfers that exceed or fall below the thresholds of 10%, 20%, 33%, and 50%. Additionally, the transfer of privileged shares that grant representation rights in the board of directors is subject to approval regardless of any specific threshold. For share transfers below 10%, a notification to the Board is sufficient. Any transfers conducted without Board approval cannot be recorded in the share ledger and shall have no legal validity.

Another significant regulation introduced under the communiqué states that crypto asset service providers may freely participate in companies deemed appropriate by the Board, such as capital markets institutions, insurance companies, and financial institutions. However, they cannot hold shares in companies where they own more than 10% of the paid-in capital or in companies where their executives hold more than 25% of the shares. Apart from these restrictions, total investments in other companies must not exceed 25% of the shareholders' equity.

Prohibited Activities and Transactions of Crypto Asset Service Providers Have Been Regulated.

With Communiqué No. III-35/B.1, it has been stipulated that crypto asset service providers may only offer services for which they have obtained approval from the Board. They are prohibited from engaging in industrial or agricultural activities and from accepting deposits or participation funds. Additionally, they cannot issue documents representing their financial commitments, engage in the commercial trading of real estate, or make commitments guaranteeing a specific return on crypto assets. Unauthorized disposal of client assets and granting employees or clients the opportunity to conduct transactions beyond ordinary business relationships are also prohibited.


Click here to access Communiqué No. III-35/B.1 on the Establishment and Operational Principles of Crypto Asset Service Providers.

COMMUNIQUÉ NO. III-35/B.2

What Regulations Have Been Introduced Under the Communiqué?

 Certain Services and Activities Provided by Crypto Asset Service Providers Have Been Made Subject to Board Approval.

With Communiqué No. III-35/B.2, it has been regulated that certain services and activities related to crypto assets may only be carried out with prior approval from the Board. Accordingly, the trading, exchange, and transfer of crypto assets, custody services, intermediation in the initial sale or distribution of crypto assets, storage and management of private keys, investment advisory services, and other services to be determined by the Board shall only be conducted upon obtaining approval.

Capital Adequacy and Equity Obligations Have Been Established for Crypto Asset Service Providers.

With Communiqué No. III-35/B.2, the activities of crypto asset service providers have been subject to specific regulations. Accordingly, platforms must have a minimum establishment capital of 150,000,000 TL, while custody institutions must have at least 500,000,000 TL in establishment capital.

The equity capital of crypto asset service providers cannot be lower than their establishment capital, and as of the sixth month of each year, at least 25% of it must consist of paid-in or issued capital. Furthermore, while the equity capital of platforms must not fall below the liquid reserve requirement, custody institutions are required to hold additional equity capital amounting to 1.5% of the excess amount when total customer assets exceed 1,000,000,000 TL. This obligation will be monitored periodically based on the three-month arithmetic average.

Another significant regulation concerns customer assets. At least 95% of customer assets must be held by custody institutions, while the portion that may be stored by platforms is limited to 5%. However, if this ratio exceeds 10% within the day, the excess amount must be immediately transferred to the custody institution. Platforms are also required to maintain a liquid reserve amounting to 3% of customer assets, with its scope and calculations subject to determination by the Board. Additionally, platforms and custody institutions are jointly and severally responsible for monitoring transfer transactions in real time and obtaining confirmation from customers in case of unusual transactions.

A Compliance Process Has Been Established for Crypto Asset Service Providers.

Under the Principle Decision dated August 8, 2024, platforms that have applied for establishment or are currently in operation must ensure that their custody infrastructure complies with the regulations set forth in Communiqué No. III-35/B.2 no later than June 30, 2025. Additionally, these entities must comply with capital and equity obligations from the date of application, while compliance with other provisions of Communiqué No. III-35/B.2 must be achieved by June 30, 2025, at the latest.

In conclusion, Communiqués No. III-35/B.1 and III-35/B.2 regulate the activities of crypto asset service providers, introducing many critical regulations ranging from establishment conditions to operating licenses, from capital and equity requirements to custody and liquid reserve requirements, and detailing share transfers, protection of client assets and compliance processes. Thus, it is aimed to make the crypto asset market more stable and auditable. All these regulations support a healthier growth of the crypto asset market and better alignment with traditional financial markets.

Click here to access Communiqué No. III-35/B.2 on the Working Procedures, Principles, and Capital Adequacy of Crypto Asset Service Providers.