As is known, the issue of legal regulations regarding crypto assets has long been on the agenda. In this context, the Bill on Amending Capital Markets Law No. 6362 ("Bill") was submitted to the Grand National Assembly of Türkiye on May 16, 2024.
The Bill is considered a significant step in regulating and supervising the cryptocurrency market in Türkiye. The Bill aims to bring crypto asset service providers (“SP”) under the supervision of the Capital Markets Board (“CMB”), regulate the obligations of the platforms, determine the sanctions to be imposed, and thus increase transparency and security in the market.We have summarized the major topics and regulations of the Bill in this article.
Scope
The Bill defines crypto-assets, SPs and crypto-asset platforms, mainly regulates the activities of these platforms and the trading and transfer transactions that persons in Türkiye may make through these platforms.
Establishment and Activities of SPs
According to the Bill, SPs will be required to obtain permission from the CMB to establish and operate.
In addition, secondary regulations to be implemented by the CMB will determine the principles and rules that SPs must comply with.
Main Obligations of SPs
The Bill mandates SPs to establish an internal control unit to ensure a secure system and comply with the information system and technological infrastructure criteria determined by TÜBİTAK (The Scientific and Technological Research Council of Turkey).
Furthermore, the Bill requires SPs and customers to sign contracts and allows these contracts to be made via remote communication tools.
Powers of the CMB
Under the Bill, the CMB will be authorized to determine the principles for the issuance of capital market instruments as crypto assets.
The CMB may regulate the content of contracts between SPs and customers, as well as fees and termination conditions, and may invalidate conditions that limit the responsibilities of SPs.
The audit of SPs will be carried out by independent audit firms authorized by the CMB.
The CMB may issue access-blocking decisions for unauthorized activities.
Obligations of Crypto Asset Platforms
The Bill imposes obligations on platforms such as determining crypto assets to be traded, adopting written procedures for terminating their trading, developing internal mechanisms to resolve customer complaints, and verifying the identities of customers.
Additionally, the bill regulates that platforms must keep their assets separate from users' assets.
Sanctions Imposed by the Bill
Under the Bill, SPs will be liable for damages arising from their unlawful activities or failure to fulfill their obligations.
In this context, administrative fines may be imposed for actions contrary to the law or CMB regulations.
In addition, those who provide unauthorized cryptoasset services can be sentenced to imprisonment of three to five years and a punitive fine.
In cases of embezzlement by SPs, the chairperson and board of directors members can be sentenced to imprisonment of eight to fourteen years and a punitive fine.
The activities of platforms residing abroad for Turkish residents will be considered within the scope of unauthorized service provision.
Transitional Provisions
Following the approval of the Bill, SPs operating at the date of entry into force of the relevant regulations will be required to apply to the CMB within one month to obtain operating permission or to decide on liquidation within three months and will not accept new customers. Organizations to be liquidated will publish this decision on their websites and will be obliged to notify their customers.
SPs wishing to initiate operations after the entry into force of the regulations will apply to the CMB and these applications will be announced on the CMB's website and these applications will be announced on the CMB's website.