The Capital Markets Board Has Issued an Announcement Outlining the Information and Documentation Required for Crypto Asset Service Providers to Submit Activity Permit Applications

03.07.2024

The Capital Markets Board (“CMB“) published an announcement on its official website on 2 July 2024. This announcement addressed the regulatory gap that emerged with the enforcement of the Law Amending the Capital Markets Law No. 7518, which was published in the Official Gazette on the same day.

The Law Amendment introduced Transitional Article 11, which sets out transition provisions for crypto asset service providers (“CASPs“) already operating in Türkiye. According to these provisions, CASPs in operation as of the date the regulations came into force must apply to the CMB for an operating licence by 2 August 2024 or decide to liquidate and cease accepting new clients by 2 October 2024. Furthermore, the operations of ATM-like electronic transaction devices in Türkiye, which enable the conversion and transfer of crypto assets, must be terminated by 2 October 2024. Similarly, the activities of CASPs based abroad targeting residents in Türkiye must also end by the same date. The secondary legislation is expected to come into effect by 2 January 2025.

In this context, the CMB has stipulated that CASPs intending to continue operations must submit the Application Documents and Information Form in writing by 2 August 2024. The information and documents to be submitted to the CMB are briefly as follows:

Company Information:

— Company name, address, date of establishment, contact information, capital details, financial information (profit/loss, revenues, equity, total assets), affiliates, debt information, credit details of partners, significant legal disputes, partnership structure, board members, general manager and assistants, customer numbers, employee details, outsourced services. Crypto Asset Information:

— Types and values of stored crypto assets (on behalf of customers and the platform), values of crypto assets in hot and cold wallets, value of cash assets held on behalf of customers.

Documents:

— Company articles of association, latest activity report, commercial registry records, financial statements certified by a sworn financial advisor or independent financial advisor.

— A board decision affirming the CASP’s intention to continue operations.

— Recent criminal record certificates, identity card/passport samples, diploma copies, and resumes of the CASP’s partners, board members, general manager, and assistants.

Additional Information:

— The company’s information system infrastructure, processes and tools for protecting customer assets, blockchain transaction processes, integrations with other systems, operation and reporting processes, risk management procedures.

— Information about the company’s storage infrastructure (operation of the storage system, whether services are outsourced, technologies used for wallets).

— Organizational chart.

Ultimately, CASPs failing to comply with the specified obligations may be considered unauthorized operators, potentially leading to severe legal and administrative sanctions, including imprisonment and fines.

You can access the CMB Announcement and related appendices via the following link:

https://spk.gov.tr/duyurular/basin-duyurulari/2024/kripto-varlik-hizmet-saglayicilara-iliskin-duyuru

This website is available “as is.” Turkish Law Blog is not responsible for any actions (or lack thereof) taken as a result of relying on or in any way using information contained in this website, and in no event shall they be liable for any loss or damages.
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