The First Law Covering Crypto-Assets in Türkiye Will Boost Crypto-Assets Market in EMEA

Türkiye is a powerhouse in the EMEA region, leading in various sectors and standing out prominently in the crypto-assets market. Currently, it ranks first in Europe and fourth globally in crypto-asset trading volume. In a significant move to solidify its position and provide a robust legal framework, Türkiye has introduced its first comprehensive law regulating, among others, crypto-assets, crypto-asset service providers, and crypto-asset custody services.

This milestone has been achieved through amendments to the Capital Markets Law, which now includes provisions specifically tailored for the burgeoning crypto-asset market. These amendments empower the Capital Markets Board to issue secondary regulations, expected by the end of 2024, that will detail the operational, legal, and financial aspects, ensuring thorough market supervision.

Below, you will find a detailed list of the amendments, providing a clear view of the comprehensive scope of the amended law. This initiative marks a significant step forward in Türkiye’s commitment to fostering a secure and regulated environment for crypto-assets, enhancing investor confidence, and supporting market growth.

Stay tuned as Türkiye continues to set the pace in the global crypto-assets landscape.

The New Provisions in the Capital Markets Law

1. Definitions:

2. Issuance and Tracking of Capital Market Instruments as Crypto-Assets:

3. Conditions for the Establishment License and Operation License of CASPs:

Conditions related to founders, shareholders, and board members

4. Conditions and Obligations for Internal Organizations and Operational Affairs of CASPs and Platforms

5. Provisions for the Scientific and Technological Research Council of Türkiye (TÜBİTAK) to Determine Criteria on Various Technical Issues and for the Capital Markets Board (CMB) to Seek Opinions:

6. Covered Crypto Assets:

CMB can also regulate that crypto assets whose value cannot be separated from their underlying blockchains are not subject to capital market instruments rules.

7. Segregation of Funds for CASPs and their Customers

8. Compliance:

9. License Conditions Foreign Centralized Crypto-Asset Exchanges:

10. Types of Legal Responsibilities, Audits, Measures, Sanctions, and Crimes for CASPs:

11. The crime of providing unauthorized crypto-asset services

12. Measures to be applied in investigations of market manipulation, insider trading, and market fraud

13. Legal liabilities of CASP shareholders, board members, and employees based on certain criteria

14. The crime of embezzlement for CASP board members, shareholders, controllers, and relevant employees

15. Platforms must transfer 1% of their annual revenue (excluding interest) to the CMB and 1% to TÜBİTAK

16. Topics for which the CMB will issue secondary regulations:

– Scope, amendment, termination, mandatory provisions, fees, and expenses of customer contracts

-Publications, announcements, advertisements, and notifications for CASPs

– ICOs and trading on Platforms

– Sale and distribution of L-1 native coins (BTC, ETH, etc.) on Platforms without being subject to capital market instruments provisions in the Capital Markets Law

– For Platforms to create “listing procedures” for the ICO and/or listing and de-listing of crypto-assets

-Exchange, transfer, custody of crypto assets

-RWA tokenization: Crypto-assets providing rights specific to capital market instruments (security tokens)

-Custody: The CMB’s authority to regulate:

        **for any crypto-assets; or,

        **for the technological features underlying the                     

           crypto-assets or the characteristics and quantities of the        

           crypto assets

-Audit: Audit of information systems and independent financial audit