Regulations on Crypto Assets Know No Bounds

The Law on Amendments to the Capital Markets Law, which included significant regulations on crypto assets, had been published in the Official Gazette on 2 July 2024 and entered into force with transitional provisions and the Capital Markets Board (Board) was authorized to determine the principles regarding the establishment, shareholders, directors and capital of crypto asset service provider companies.

Accordingly, the Board had published its first principal decision on 8 August 2024. The relevant decision included the principles required for platforms where one or more of the crypto asset trading, initial sale or distribution, clearing, settlement, transfer, custody and other transactions that may be determined.

Recently, the Board has published a new principal decision (Decision) outlining that there are different practices in the storage of customer cash, customer orders are received via social media, and regulations should be made regarding the listing of crypto assets. It is also emphasized that crypto asset platforms need to be regulated in terms of advertising, announcements and investor protection.

Primary principles in the Decision are as below:

– Accounts opened on behalf of customers should be clearly identified as belonging to platform customers and should not be used for purposes other than the specified purpose.

– Customer orders should only be received through websites, mobile applications or registered phones specified by the platforms. Otherwise, orders received through other methods will be deemed unauthorized activity.

– Transactions such as receiving or delivering cash from customers by hand are prohibited.

– It is regulated that customer orders cannot be received via social media platforms such as WhatsApp and Telegram.

 –The cash belonging to customers must be kept in banks, and the accounts opened in the name of the customer cannot be used for any other purpose.

– As emphasized in the Board's previous principal decision, it was underlined again that platforms should only execute customers' cash transfers through authorized banks or institutions.

– Establishing the necessary infrastructure to store the log records of orders with a time stamp and to keep the records in this way as of 8 November 2024; became mandatory.

– It is regulated that NFTs and assets used only in virtual games are outside the scope of the law. It was also stated that the platforms on the list of those operating should put a warning when they list these assets and notify the Board.

– It was regulated that the activities of making regular transactions for commercial purposes on P2P marketplaces on behalf of oneself but on someone else's account should be terminated until 8 November 2024. It was stated that these activities may be considered as unauthorized crypto asset service provision.

– Platforms are required to be objective in their advertisements, announcements and not to use misleading information.

– Promotional campaigns in which any advantage or benefit is provided to the people who bring customers to the platform by any method or to the customers they bring to the platform cannot be organized.

– Promotional campaigns that offer the promise of return (staking) or direct investment in certain crypto assets are prohibited.

– Lending crypto asset transactions, transactions with the purpose of lending and leveraged transactions are prohibited.

– Platforms must provide the necessary technical infrastructure for data transfer to the Central Registry Agency (CRA) and perform system integration within the framework of the manner and timetable stipulated by the CRA.

– If crypto assets are not stored in customers' wallets, platforms must ensure the control of wallet keys until 8 November 2024.

This principal Decision could be described as one of the milestones in terms of ensuring order in the crypto asset sector and increasing investor security. Complying with the Decision will not only require platforms to operate within a transparent and legal framework, but it will also be a crucial step in establishing permanence and trust in the sector.

You can reach the full text of the relevant principal decision of the Board here (only available in Turkish).