On 02.07.2024, the Law Amending Capital Markets Law (“Law”) No. 7518 was published in the Official Gazette numbered 32590 and entered into force. By this Law, the regulatory and supervisory authorities of the Capital Markets Board (“Board”) concerning crypto asset service providers are determined in detail. Thereupon, the Board published the Announcement Regarding Crypto Asset Service Providers (“Announcement”) dated 02.07.2024.
Articles 35/B and 35/C, which were added to follow Article 35/A of the Capital Markets Law with Articles 3 and 4 of the Law, generally grant various powers to the Board in terms of supervision of crypto asset service providers. Within the scope of these authorisations, the Board has issued an Announcement to clarify certain articles of the Law, and the annexes to the Announcement contain the necessary forms for the relevant parties to provide the necessary information, documents and explanations to the Board
1. Scope of the Law
“Crypto asset service provider” is defined in Article 1 of the Law, to be added to Article 3 of the Capital Markets Law, as “Platforms, institutions providing crypto asset custody services, and other organizations designated to provide services in relation to crypto assets including the first sale or distribution of crypto assets in the regulations to be made based on this Law”.
As also underlined by the Announcement, the Law governs “every medium where one or more of; purchase, sale, setoff, transfer and storage service required by these and storage and management of crypto assets or the special key providing transfer right to the wallet related to these assets are enforced as a regular endeavour, commercial or occupational activity.” Articles 99/A and 109/A added to Capital Markets Law with the Law, will apply to those who breach their obligations despite being governed by the Law and will be examined in detail below.
2. Transition Provisions, Provisional Art. 11/1
• In the Provisional Article 11 of Capital Markets Law added with Article 17 of the Law, “the transition provisions regarding crypto asset service providers” is regulated. The matters included the first paragraph of the article are explained in detail in the Announcement.
Regarding the provision in the first sentence, those who execute crypto assets service provider activities and have the intention to continue must file an application to the Board with the documents identified in Annex-1 and Annex-2 and present their written declarations until 02.08.2024.
As can be found in the following, those who do not have the intention to continue their crypto assets service provider activities, as stated in the Announcement, must decide to liquidate until 02.082024 and declare that they will not accept new customers during liquidation process; and in addition, must inform the Board in writing with the form included in Annex-2 on how the liquidation process will be executed. Those who will decide to liquidate until 02.10.2024 (within three months), without prejudice to the provisions of the TCC No. 6102, are obliged to announce this situation and inform their customers, and in this regard, the responsibility lies with the institution to be liquidated.
Organizations that will start operating before the secondary regulations to be issued by the Board come into force must submit to the Board in writing; the information, documents and explanations specified in Annex-1 and Annex-2 of the Announcement and their statements in accordance with the first paragraph of Provisional Article 11, before starting operating.
In addition, with the query made by the relevant parties by the link https://spk.gov.tr/kurumlar/kripto-varlik-hizmet saglayicilar , the applications filed to the Board may be found in the lists “Faaaliyette Bulunanlar Listesi (List of operating organizations) and “Tasfiye Beyanında Bulunanlar Listesi” (List of organizations that declared liquidation) under the tab “Kurumlar/Kripto Varlık Hizmet Sağlayıcıları” (Organizations/ Crypto asset service providers).
After the publication of secondary regulations by the Board, organizations that are not included in these lists will not be able to operate without the permission of the Board; organizations that are included in the lists will apply for operation permit in accordance with the conditions to be determined by the secondary regulations while continuing to operate. Articles 99/A and 109/A shall apply to those who do not apply to the Board through explained procedures until the aforementioned dates.
Similarly, in the case that the transfer requests of customers who have accounts in organizations that do not have the intention to continue their crypto asset service provider activities and prefer to go into liquidation or who do not file an application to the Board within the above mentioned periods are not fulfilled by these institutions, in accordance with Article 109/A of Capital Markets Law added by the Law, it will constitute the crime of “unauthorized crypto asset service provider activity”, and these persons may be subjected to the penalty of imprisonment from three to five years and a judicial fine from five thousand days to ten thousand days.
• In article 99/A of Capital Markets Law, added by article 8 of the Law to follow article 99, “The measures to be applied to the activities of crypto asset service providers” are regulated. The first paragraph of the article is highlighted in the Announcement.
4. In Respect of Non-Resident Crypto Asset Service Providers
As explained in the Announcement, in accordance with this provisions, the crypto asset service providers based abroad must terminate their activities towards persons residing in Türkiye until 02.10.2024 the latest; regarding those who continue their activities towards persons residing in Türkiye despite of this provision, added articles 99/A and 109/A of Capital Markets Law shall apply.
• Article 109/A of Capital Markets Law, added by article 12 of the Law to follow article 109, regulates “Unauthorized crypto asset service provider activities”.
5. Transition Provitions, Provisional Art. 11/5
• In the 5th paragraph of the Provisional Article 11 added to the Capital Markets Law by Article 17 of the Law stipulates that the activities of ATMs and similar electronic transaction devices located in Turkey, which allow customers to convert crypto assets into cash or cash into crypto assets and to transfer crypto assets, must be terminated until 02.10.2024, and Articles 99/A and 109/A will be applied for activities contrary to this provision.
