CMB Regulated the Activities of Crypto Asset Service Providers

Recent Developments

The Communiqué on Operating Procedures and Principles and Capital Adequacy of Crypto Asset Service Providers numbered III-35/B.2 (the “Communiqué“) published in the Official Gazette dated 13 March 2025 and numbered 32840. With the Communiqué, the Capital Markets Board (the “CMB“) introduced important regulations on matters such as activities that crypto asset service providers (the “CASPs”) can perform, the principles that they must comply with when carrying out their activities, the process for listing crypto assets, custody services for crypto assets and the capital adequacy of CASPs.

Services to be Provided by CASPs

Under the Communiqué, the following services can only be offered by the CASPs authorized by the CMB:

1. 1. Receipt and execution, clearing, settlement of orders related to crypto assets and transfer of crypto assets and custody services required by these services.

2. 2. Intermediation of the initial offering or distribution of crypto assets.

3. 3. Custody and management of crypto assets or private keys related to these assets or other custody services to be determined by the CMB.

4. 4. Investment consultancy in respect of crypto assets.

5. 5. Other services to be determined by the CMB.

Moreover, CASPs may provide the following services in connection with the services they are authorized to provide by submitting a notification to the CMB, without obtaining a separate authorization:

1. 1. Trading, initial sale or distribution, clearing, transfer or custody of crypto assets that are used to record the representation and ownership of digital assets, which are non-replicable and unique (the “NFTs“)  and crypto assets that are only used to create or provide various elements in virtual games.

2. 2. Financial analysis and general advice services in respect of crypto assets.

Activities of Nonresident CASPs

Pursuant to the Communiqué, a non-resident CASP will be able to provide crypto asset services to Turkish residents, provided that the service is provided upon the Turkish resident client’s request and the non-resident CASP does not engage in any activities such as promotion, advertising or marketing directed at residents in Türkiye (i.e. unsolicited reverse inquiry basis). In this respect, non-resident CASPs can provide crypto asset services to Turkish residents by complying with the reverse solicitation principle without obtaining an authorization from the CMB.

Accordingly, nonresident CASPs cannot open a workplace in Türkiye, create a website in Turkish, and engage in promotional and marketing activities directly and/or through persons or institutions resident in Türkiye regarding their crypto asset services.

Platform Activities

Under the Communiqué, platform activities are defined as the receipt, matching or counterparty execution, and clearing of client orders in relation to crypto assets, initial sale or distribution, transfer, custody and other transactions that may be determined by platforms. Platforms can execute client orders by matching them with other client orders according to the priority rules set out in the Communiqué or by covering them from their own portfolios.

Furthermore, the provisions set forth in the CMB’s resolution numbered i-SPK.35.B.1 (dated September 19, 2024 and numbered 1484) are similarly regulated in the Communiqué. Accordingly:

• - Institutions whose main activity is trading, initial sale or distribution, clearing, transfer or custody of NFTs and crypto assets that are only used to create or provide various elements in virtual games will not be considered platforms.

• - Liquidity providers, whose main activity is to provide prices to platforms to generate liquidity and execute transactions based on the prices provided, and which do not provide any other services to investors that may fall within the scope of the definition of platform, will not be considered platforms.

• - Operating peer-to-peer digital marketplaces that enable the direct purchase, sale and exchange of crypto assets between clients will also be considered a platform activity.

Platforms may establish specific markets where crypto assets will be traded by taking into account the project owner, the qualifications of buyers and sellers, listing conditions, liquidity status and similar criteria.

Platforms must check the minimum elements to be included in smart contracts according to the type and legal nature of each crypto asset of which they will intermediate in the initial sale or distribution, and examine the accuracy of the contracts. Accordingly, platforms cannot intermediate in the initial sale or distribution of crypto assets that do not comply with the minimum listing criteria in the Communiqué.

Platforms can custody crypto assets belonging to their clients in one or more wallets collectively, provided that they comply with the limitations set out in the capital adequacy requirements.

In addition, if custody institutions are unable to provide custody services for a certain crypto asset listed on the platforms, platforms will be able to keep the asset for a maximum period of six months, without prejudice to the capital adequacy requirements.

The Communiqué also stipulates that platforms must establish an order execution policy to be put into effect by a board resolution. It must include the minimum requirements set forth in the Communiqué. The platforms will review the order execution policy at least once a year.

Prohibited Transactions Related to Crypto Assets

The Communiqué prohibits certain transactions related to crypto assets to ensure that crypto asset markets function well. Crypto assets listed on platforms cannot be traded on a leveraged basis, nor can they be subject to derivative contracts, purchases on credit, short sales and lending transactions.

Investment Consultancy and Portfolio Management Related to Crypto Assets

Platforms will only be able to provide investment consultancy services to clients whose crypto asset size on the platform with a value of at least TRY 50,000,000.

However, managing client portfolios on behalf of each client, as a proxy in consideration of a direct or indirect benefit is prohibited.

Listing Committee and Listing Principles

The Communiqué introduces significant regulations regarding the process of listing crypto assets on platforms. In this respect, platforms are required to establish a listing committee consisting of at least three members, the majority of which must have at least seven years of experience in finance, law, information technologies, information security and distributed ledger network technologies. In addition, at least one board member must serve on the listing committee.

The listing committee will be responsible for making decisions regarding the listing and delisting of crypto assets and checking whether the crypto assets to be listed comply with the Communiqué with due prudence and care.

As a rule, platforms will list crypto assets that may be kept by custody institutions authorized by the CMB. In addition, the crypto assets to be listed on platforms must comply with the principles set forth in the Communiqué.

Pursuant to the Communiqué, platforms are required to establish a written procedure setting out the principles for determining the crypto assets to be traded and terminating their trading. The minimum content of the procedure is set out in the Communiqué.

The current list of crypto assets deemed eligible for listing pursuant to the listing procedure will be published on platforms’ websites together with the current version of the procedure. The procedure will be reviewed at least once a year.

If platforms determine that the crypto assets they have listed no longer meet the criteria set out in the procedure, they will be able to delist the relevant crypto assets pursuant to the evaluation report they will prepare.

Custody Services for Crypto Assets

Custody services may be provided by banks that have obtained authorization from the CMB and that have been deemed appropriate by the Banking Regulatory and Supervisory Authority or other institutions authorized by the CMB.

Crypto asset custody service refers to the custody and management of crypto assets or the private keys related to assets that platform clients prefer not to keep in their own wallets, or other custody services to be determined by the CMB. Under the Law and the Communiqué, as a rule, the crypto assets belonging to platform clients must be kept in clients’ own wallets. Accordingly, platforms and custody institutions will be required to sign a service agreement.

Clients’ crypto assets will be kept under custody collectively on behalf of the platform, separate from the custody institutions’ own accounts.

Custody institutions can also provide custody services directly to their clients that are not clients of platforms. However, providing wallet services with a method in which the client retains entire control of the private key will not be considered custody services.

Custody institutions must establish a written procedure, which will be put into effect by the board of directors’ resolution, containing the principles regarding the provision of the custody service, and this procedure must be reviewed at least once a year.

The Communiqué also introduces general principles and rules regarding custody services and special rules regarding wallet technologies.

Integration with the Central Securities Depositary

With the Communiqué, platforms and institutions must integrate with Merkezi Kayıt Kuruluşu A.Ş. (the Turkish Central Securities Depository) (the “CSD“) for clients’ crypto asset balance information kept in the institution’s book-entry system and to make the reports requested by the CSD available.

Capital Adequacy

The Communiqué introduces significant capital adequacy requirements for CASPs to ensure their financial health is protected.

In this respect, platforms’ share capital must be at least TRY 150,000,000, and custody institutions’ share capital must be at least TRY 500,000,000 upon their establishment. In addition, the shareholders’ equity of CASPs must not be less than the aforementioned minimum initial share capital amounts, and at least 25% of the shareholders’ equity must consist of paid-in or issued capital as of the sixth month of each year.

In addition, the shareholders’ equity of platforms must not be lower than the liquid reserve obligation to be calculated in accordance with the Communiqué.

For custodians, if the total amount of client assets they keep under custody is up to TRY 1,000,000,000, no additional amount of shareholders’ equity will be required. If the total amount of client assets exceeds TRY 1,000,000,000, the custody institution must have shareholders’ equity equal to 1.5% of the exceeding amount in addition to its share capital required for establishment.  If the shareholders’ equity is TRY 1,500,000,000, no additional shareholders’ equity will be required.  The shareholder’ equity obligation will be monitored at the end of the third, sixth, ninth and twelfth months of each year.

In addition to the shareholders’ equity requirement, CASPs’ capital base calculated in accordance with the Communiqué cannot be lower than the total risk provision calculated in accordance with the Communiqué or the operating expenses incurred in the last three months prior to the reporting date.

The sum of all short- and long-term debts of CASPs on their balance sheet cannot exceed three times their capital base. In addition, CASPs will be required to hold current assets that are at least equal to their short-term debt.

The Communiqué also requires platforms to maintain liquid reserves in certain compositions for clients’ assets kept on the platform.

Except for the custody limits set forth in the Communiqué and the obligations regarding the monitoring of these limits, the capital adequacy requirements will not apply to banks providing custody services.

Financial Reporting Obligations

The provisions of the CMB’s Communiqué on Principles Regarding Financial Reporting in Capital Markets numbered II-14.1 will apply, mutatis mutandis, to CASPs’ financial reports as well as their preparation and presentation to the relevant parties.

In addition, CASPs will be subject to independent audit in accordance with the CMB’s Communiqué Serial: X, No: 22 on Independent Auditing Standards in Capital Markets regarding their financial statements.

Transition Period

The custody infrastructures of the platforms that are included in the CMB’s “List of Operating Companies” as of the publication date of the Communiqué and those that have applied before the publication date of the Communiqué will be required to comply with the custody regulations in the Communiqué as of 30 June 2025.

These institutions will be required to comply with the capital and shareholders’ equity requirements as of the date they apply to the CMB for an operating license, and with the other capital adequacy provisions of the Communiqué until 30 June 2025 at the latest.

A significant portion of the Communiqué provisions will enter into force on 30 June 2025.