Bill on Crypto Assets Passed by the Parliament

The Bill on Amendments to the Capital Markets Law submitted to the Turkish Grand National Assembly was accepted at the General Assembly. Thus, various definitions regarding crypto assets were made officially for the first time. With the definitions, new regulations regarding crypto assets also came.

The definitions according to the regulation are as follows:

Wallet: Software, hardware, systems or applications that enable the transfer of crypto assets and the storage of these assets or private and public keys related to these assets online or offline,

Crypto-asset: Intangible assets that can be created and stored electronically using distributed ledger technology or a similar technology, distributed over digital networks, and capable of expressing value or rights,

Crypto asset service provider: Platforms, organizations that provide crypto asset custody services and other organizations designated to provide services related to crypto assets, including the first sale or distribution of crypto assets in the regulations to be made based on this Law,

Crypto asset custody service: Storage and management of platform customers’ crypto assets or private keys that provide the right to transfer these assets from the wallet, or other custody services to be determined by the Board,

Platform: Organizations where one or more of the crypto asset purchase and sale, initial sale or distribution, clearing, transfer, storage required thereof and other specified transactions are carried out.

The central registry agency will be authorized

The central registry agency will be authorized to determine the principles for the issuance of capital market instruments as crypto assets without being included in the Central Registry Agency system. The Board will be able to determine the principles regarding the issuance of these assets as crypto assets, instead of monitoring them by MKK, and their recorded monitoring in the electronic environment provided by the service providers where they are created and stored. The records in which crypto assets are created and stored will be taken as basis in monitoring the rights of these assets, asserting them against third parties and transferring them.

Additionally, crypto asset service providers will need to obtain permission from the Board to be established and begin operations. These organizations will carry out the activities determined by the board. Principles regarding their establishment and commencement of operations, partners, managers, personnel, organization, capital and capital adequacy, liabilities, information systems and technological infrastructures, share transfers, activities they may undertake, temporary or permanent suspension of their activities, and other principles and principles they must comply with during their activities. It will be determined by the board. It will be mandatory to obtain Board permission for share transfers. Transfers that violate the regulation will not be recorded in the share ledger, and records made in violation will be deemed null and void.

Crypto asset service providers will be obliged to make the necessary arrangements, take precautions and establish the necessary internal control units and systems so that their systems can be managed safely. In order for crypto asset service providers to be permitted by the Board to establish and/or start operations, compliance with the criteria to be determined by TÜBİTAK regarding information systems and technological infrastructures will be required.

New conditions come for partners establishing service providers

According to the new regulation, the partners of crypto asset service providers must not be bankrupt, must not have declared bankruptcy, their application for restructuring by compromise must not have been approved or a decision to postpone bankruptcy has been made, as well as they must not have a final conviction for crimes listed in the relevant laws, and the transaction must not be prohibited; On the other hand, they will be required to have the necessary financial strength, the honesty and reputation required for the business, and the partnership structure to be transparent and open.

CMB, on the other hand, will have the authority to regulate the procedures and principles in the purchase and sale of crypto assets through the platforms and in the first sale or distribution transactions, exchange, transfer and storage of crypto assets.

Crypto asset service providers will not be subject to any other provisions of the Law other than the provisions referred to. In addition, platforms will be guaranteed price freedom. Platforms will determine order and transaction principles, establish the necessary surveillance system and take all kinds of preventive measures in order to ensure that transactions are carried out in a reliable, transparent, effective, stable, fair, honest and competitive manner, and to detect, prevent and prevent repetition of market-distorting actions and transactions. .

Prevent market-distorting transactions

It will be obliged to make determinations regarding market-distorting actions and transactions carried out on the platform, to take the necessary measures, including restricting, stopping and closing the accounts that carry out such actions and transactions, and to report the findings to the Board.

The relations between the platforms and their customers and any disputes that may arise due to transactions to be carried out on the platform will be subject to general provisions. Crypto assets will not be subject to investor compensation provisions. Records regarding the wallets where customers’ crypto asset transfers are made and the accounts where fund transfers are made will be kept secure, accessible and traceable by crypto asset service providers. The integrity, accuracy and confidentiality of all transaction records will be ensured. In customers’ crypto asset transfer transactions, the regulations made by the Board and the Financial Crimes Investigation Board will be complied with. The information and data intended to be included in transfer messages regarding the sender and receiver will be sent securely by crypto asset service providers within the periods specified in the regulations. For this purpose, software applications and technological tools that enable messaging, such as distributed ledger technology, another independent messaging platform or application interface, can be used.

It will be essential for the platforms to keep the crypto assets belonging to their customers in the wallets of the customers, and the crypto assets stored in banks and the cash belonging to the customers within this scope will not be subject to the insurance provisions of the deposit and participation fund regulated in Article 63 of the Law.