Significant Principal Decision from the Capital Markets Board for Crypto Asset Platforms

The Law Amending the Capital Markets Law, which includes significant regulations on crypto assets, was published in the Official Gazette on 2 July 2024 and entered into force with transitional provisions.

Within the scope of the relevant amendments, pursuant to Article 35/B of the Capital Markets Law (Law), the Capital Markets Board (Board) was authorized to determine the principles and requirements regarding the establishment, partners, managers and capital of crypto asset service provider companies.

Accordingly, the Board published its first principal decision (Decision) on 8 August 2024. The Decision includes the principles and requirements 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 (Platform/s).

We have compiled these principals and requirements set forth in the Decision below.

Conditions for the Establishment of Platforms

In order for the establishment of platforms to be authorized by the Board;

- To be established as a joint stock company,

- All of its shares must be registered shares,

- Issuance of shares against cash,

- Its minimum capital of 50.000.000 Turkish Liras must be fully paid in cash and its shareholders' equity must not be less than this amount,

- Their articles of association are in compliance with the provisions of the Law and related regulations,

- The founders must fulfil the conditions specified in the Law and the relevant regulations,

- Including the phrase "crypto asset trading platform" in their trade names to indicate the services they will offer,

- Its articles of association stipulates that its field of activity is exclusively crypto-asset trading, initial sale or distribution, clearing, settlement, transfer and realization of one or more of the custody transactions required by these transactions,

- The board of directors to consist of at least three members,

- The shareholding structure must be transparent and open.

Decision also states that the amount stipulated for the capital may be increased within the scope of the regulations to be issued regarding the operating principles.

Conditions for Founders, Shareholders and Managers

Within the scope of the Decision, for the Platform founders and partners;

- Not to be bankrupt, not to have declared concordat, not to have approved the restructuring application through reconciliation, or not to have been granted a postponement of bankruptcy,

- No convictions for certain offences,

- Not being banned from trading,

- Not holding 10% or more shares in the organizations specified in the Law,

- Lack of responsibility for the event affecting the decision in institutions whose operating licenses are cancelled by the Board,

- It is stated that the necessary financial strength and honesty and reputation required by the business will be sought.

Decision also stipulates that the directors must fulfil the conditions stipulated for shareholders, except for the financial strength requirement. It is also required that the majority of the members of the board of directors must be graduates of 4-year undergraduate schools.

Establishment Procedures of Platforms

Founders are required to apply to the Board with (i) the articles of association to be prepared in accordance with the conditions of establishment, (ii) documents demonstrating that the criteria required for founders, shareholders and managers are met, and (iii) the documents and forms in Annex-1 and Annex-2 shared in the Decision.

Transition and Harmonization Provisions

Companies that are or will be included in the "List of Operating Companies" prepared pursuant to the Board's announcement dated 2 July 2024 are required to apply to the Board until the close of business on 8 November 2024 by meeting the conditions stipulated in the Decision.

Our article regarding the Board's announcement dated 2 July 2024 is available here.

In addition, the Decision also states that sanctions can be imposed in case of violation of these regulations within the scope of the provisions of unauthorized crypto asset service provider activity in the Law.

It can be said that this Decision is the cornerstone of creating an organized and secure ecosystem in the crypto asset sector. Compliance with this Decision is of great importance for a long-term presence in the sector.

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