Capital Markets Board Announcement Regarding the Cyrpto Asset Service Providers

With the "Law on Amending the Capital Markets Law" No. 7518, which was published in the Official Gazette dated July 2, 2024, and numbered 32590, amendments were made to the Capital Markets Law No. 6362 ("Law").

With the said amendment, crypto asset service providers that currently operate or will in the future operate in Turkey are considered within the regulation and supervision authority of the Capital Markets Board (“Board”). And the Law also covers any medium where the purchase, sale, exchange, transfer and custody of crypto assets, and the storage and the management of these assets, or private keys providing the right to make transfers from crypto asset wallets related to these assets are performed as a regular business, commercial or professional activity.

In addition to the amendment made within the scope of the Law, the Board also announced set of procedures on its website on July 2, 2024, regarding the activities of crypto asset service providers. In this context:

(i) As of July 2, 2024, organizations engaged in and willing to continue cryptocurrency asset service provider activities must submit their declarations to the Board in accordance with the first paragraph of the Provisional Article 11 of the Law, along with the information, documents, and explanations listed in Annex/1 (application documents) and Annex/2 (information form) of the Board's announcement, by August 2, 2024.

(ii) Organizations wishing to commence operations between July 2, 2024, and the effective date of secondary regulations to be issued by the Board, must submit their declarations to the Board in accordance with the first paragraph of the Provisional Article 11 of the Law, along with the information, documents, and explanations listed in Annex/1 (application documents) and Annex/2 (information form) of the Board's announcement, before starting their operations.

(iii) Organizations engaged in cryptocurrency asset service provider activities as of July 2, 2024, but willing to cease these activities and make a liquidation decision, must submit their declarations to the Board regarding their liquidation decisions and their commitment not to accept new customers during the liquidation process, along with the form in Annex/2 (information form) of the Board's announcement, explaining how they will manage the liquidation process by August 2, 2024. Organizations that decide to liquidate must announce this decision on their websites and notify their customers through email, text messages, phone calls, and similar communication tools, in compliance with the relevant provisions of the Turkish Commercial Code No. 6102. The responsibility for notifying customers lies with the institutions to be liquidated.

(iv) The activities of ATMs and similar electronic transaction devices located in Turkey that allow customers to convert their cryptocurrency assets into cash or other cryptocurrencies and to transfer cryptocurrency assets must be terminated by October 2, 2024, at the latest.

(v) Cryptocurrency asset service providers located abroad must cease their activities directed at persons located in Turkey by October 2, 2024, at the latest.

Those who have not applied to the Board in the manner stated above and by the specified dates may be subject to proceedings in accordance with Articles 99/A and 109/A of the Law. Real persons and the authorized representatives of legal entities found to be operating as crypto asset service providers without obtaining permission, will be punished with imprisonment from three to five years and a judicial fine from five thousand to ten thousand days in accordance with Article 109/A of the Law.

Applications made to the Board will be announced in two separate lists under the "Institutions/Crypto Asset Service Providers" section on the Board's website: the "List of Active Providers" and the "List of Providers in Liquidation."

The updated lists can be accessed at https://spk.gov.tr/kurumlar/kriptovarlik-hizmet-saglayicilar.