The Long-Awaited Crypto Asset Regulations in Effect!

The long-awaited regulation on crypto assets in Turkey (Crypto Asset Law) was submitted to the Grand National Assembly of Turkey (TBMM) on 16 May 2024 with the Draft Bill on Amendments to the Capital Markets Law.

The relevant proposal was approved by the General Assembly of the Turkish Grand National Assembly on 26 June 2024. The draft bill was published in the Official Gazette on 2 July 2024 and entered into force with the transitional provisions.

Accordingly, the first legislation containing highly detailed regulations on crypto assets in Turkish legislation entered into force. In the regulation, crypto asset service providers (HS) and crypto asset platforms were defined. In addition, the Crypto Asset Law also regulates the purchase-sale and transfer transactions of crypto asset platforms by persons resident in Turkey.

Another noteworthy point is the requirement to obtain authorisation from the Capital Markets Board (CMB) in order to establish and operate HSs. As a matter of fact, the relevant institutions also initiated action after the Crypto Asset Law entered into force.

An announcement (CMB Announcement) regarding Crypto Asset Service Providers was made by the CMB on 2 July 2024 on its official website. The announcement was published on the same day as the Crypto Asset Law.

In the CMB Announcement, it was stated that HSs must apply to the CMB and obtain an operating permit until 2 August 2024 or decide to liquidate and not accept new customers until 2 October 2024.

It is also stated that the activities of ATMs and similar devices in Turkey, which enable customers to convert their crypto assets into cash or cash into crypto assets and perform crypto asset transfers, must be terminated until 2 October 2024. It was underlined that the activities of foreign crypto asset service providers for persons in Turkey should also end on the same date.

In this context, those who have been crypto asset service providers as of 2 July 2024 and are intending to continue these activities must apply to the CMB in writing until 2 August 2024, together with the information, documents and explanations detailed in the application documents and information form specified in the CMB Announcement.

You can access the application documents in the CMB Announcement here (only available in Turkish) and the information form here (only available in Turkish).

Another institution that took another action and published an announcement regarding the Crypto Asset Law was TUBİTAK.

We have compiled the important points in the announcement on the official website of Scientific and Technological Research Council of Turkey (TÜBİTAK), which has a very critical role in the relevant regulation, on 3 July 2024.

Technical Criteria for Licence: TÜBİTAK will determine the technical criteria that HSs that will apply for a licence must have. Exchanges and custodians that meet these criteria will be able to obtain a licence.

Support for Innovative Technologies: Blockchain technology will be specially supported and studies in this field will be encouraged. Permission can be obtained from the CMB for the sale or distribution of crypto assets produced by technology companies developing new generation blockchain. In such cases, TÜBİTAK will prepare a technical report on whether the project is in the original blockchain infrastructure.

Obtaining Opinion: Platforms will determine their own principles and guidelines regarding the listing or delisting of crypto assets. TÜBİTAK will be able to give an opinion on the minimum technical criteria to be followed when determining these principles.

Independent Audit: Licensed HSs will be audited by independent audit firms. TÜBİTAK will be able to provide opinions on the procedures and principles related to information systems during the audits and participate in the audits if requested by the CMB.

Financial Resources: Platforms will transfer 1% of their revenues excluding interest to the CMB and 1% to TÜBİTAK. This financial resource will be used to popularise blockchain technology in Turkey and to finance projects in this field.

You can reach the TÜBITAK announcement here (only available in Turkish).

In accordance with the Crypto Asset Law, secondary regulations regarding the amendment will be put into effect within six months. It is a matter of curiosity how the Crypto Asset Law will have an impact on the sector.

You can find the full text of the Crypto Asset Law in the relevant law amendment here (only available in Turkish).