Effective Regulations Have Been Introduced Regarding Crypto Assets

Wallet: Software, hardware, systems, or applications that enable the transfer and storage of crypto assets,

Crypto Asset: Intangible assets created and stored using distributed ledger technology or similar technologies, distributed over digital networks, and representing value or rights,

Crypto Asset Service Provider: Institutions offering crypto asset custody services and other institutions providing services related to crypto assets,

Crypto Asset Custodian Service: Services that include the storage, management, and other custody services of crypto assets or private keys,

Platform: Institutions where transactions such as buying, selling, initial sale, distribution, exchange, transfer, and storage of crypto assets are carried out.

1. Regulations Introduced for the Establishment and Activities of Crypto Asset Service Providers

• It is mandatory to obtain permission from the Capital Markets Board (Board) to establish and start operations as a crypto asset service provider. The principles regarding their establishment, shareholders, managers, personnel, organization, capital, and information systems will be determined by the Board.


• Furthermore, shareholders and board members of Crypto Asset Service Providers are required not to be bankrupt, not to have declared concordat, not to have a restructuring application approved through reconciliation, or not to have a decision for postponement of bankruptcy.

2. General Activities and Obligations of Crypto Asset Service Providers

• Crypto Asset Service Providers are obliged to make necessary arrangements for the secure management of their systems and establish internal control units.


• It is emphasized that they are responsible to their customers and that contractual clauses limiting this responsibility are invalid.


• Procedures and principles regarding the buying, selling, initial sale or distribution, exchange, and transfer of crypto assets will be regulated by the Board, and it is mandatory to ensure the secure storage and recording of customer assets.

3. Sanctions and Penalties for Non-Compliance with These Obligations

• Imprisonment and fines will be imposed on individuals and institutions operating without permission.


• Special investigation procedures and severe penalties are determined for embezzlement offenses committed by Crypto Asset Service Providers. Additionally, personal liability for damages arising from illegal activities of crypto asset service providers is regulated.

4. Implementation of These Obligations by Crypto Asset Service Providers

• Those engaged in Crypto Asset Service provision activities on the effective date of the law must apply to the Board within one month from the effective date with the documents determined by the Board and fulfill the conditions specified in the secondary regulations to be issued under Articles 35/B and 35/C of the Law to obtain an activity permit or submit a declaration that they will take a liquidation decision without harming customer rights and interests within three months and will not accept new customers during the liquidation process.


• Those who wish to start activities after the law's effective date must apply to the Board before starting their activities and declare that they will fulfill the conditions specified in the secondary regulations to obtain an activity permit. Applications made to the Board will be announced on the Board's website.


• Institutions undergoing liquidation will announce this on their websites and also inform their customers via email, SMS, phone, and similar communication tools.

5. Penalties for Non-Compliance With These Obligations

• According to the relevant regulation, the provisions of Articles 99/A and 109/A of the Capital Markets Law will apply to those who fail to fulfill their obligations. Failure to meet customer transfer requests in institutions that choose to liquidate or do not apply to the Board within the specified period will constitute an offense of providing unauthorized crypto asset service under Article 109/A.


• A period of three months has been given for foreign-based crypto asset service providers to terminate their activities in Turkey.

Additionally,

• It is regulated that the activities of ATMs and similar electronic transaction devices located in Turkey, which allow the conversion of crypto assets into cash or cash crypto assets and the transfer of crypto assets, will be terminated within three months following the effective date of the law introducing this provision.

6. Additional Regulations

• Crypto asset service providers are required to pay one percent of their annual revenues to the budget of the Capital Markets Board and TÜBİTAK,


• The auditing of crypto asset service providers and the determination of independent auditing firms will be carried out with the opinion of TÜBİTAK and other relevant institutions.

In Conclusion

• These regulations aim to reduce informality by ensuring that all transfer transactions carried out on platforms are recorded, there by increasing transparency and security,


• By setting rules for those operating in the crypto asset sector, it aims to protect the rights of investors, maintain order in the sector, and enhance market stability and security.

Aslı Pamukkale – Senior Partner