Principle Decision Regarding Crypto-Assets

In its Bulletin No. 2024/48 dated September 19, 2024, the Capital Markets Board (SPK) published a new Principle Decision regarding crypto-assets. Through the regulations introduced in this Principle Decision, SPK aims to enhance the reliability of platforms engaged in crypto asset trading, protect investors, and impose deadlines for platforms to comply with these principles. The key regulations are as follows:

1- Customer cash and crypto assets must be held in separate accounts at banks, distinct from the platform's assets. These accounts must be clearly identified as belonging to customers, and platforms cannot use these funds for other purposes. Cash transfers for customers must only be conducted through authorized banks or institutions, with no physical handling of cash.

2- Customer orders must be accepted only through the official websites, mobile applications, or registered phone lines of platforms. Orders cannot be placed through social media channels (e.g., WhatsApp, Telegram).

3- Platforms must establish the necessary infrastructure to store electronic order logs, including the date, time, and content of the orders, in an immutable format with a timestamp. For phone orders, voice recordings must be stored similarly, starting from 8.11.2024.

4- Platforms must obtain permission from SPK for financial services related to the buying, selling, initial offering, or distribution of crypto-assets. This also applies to platforms operating like exchange offices.

5- NFTs and crypto-assets used in virtual games are exempt from SPK’s listing requirements. However, if platforms trade NFTs, they must notify SPK and provide a warning in the relevant environment indicating that these assets are listed.

6- Entities primarily providing liquidity or pricing services for platforms are not subject to the Capital Markets Law.

7- Platforms allowing P2P (peer-to-peer) transactions must cease such activities by 8.11.2024. Otherwise, such transactions will be considered unauthorized.

8- Activities that fall under the jurisdiction of other institutions or organizations (e.g., commodities, real estate), even if conducted using crypto-assets, must comply with relevant regulations. Such crypto-assets cannot be listed on platforms otherwise. The same applies to capital market instruments, and no new sales or distribution of listed assets can occur. However, the conversion or transfer of previously sold assets at customer request is permitted.

9- Platforms must ensure that announcements, advertisements, and notifications are objective and cannot be misleading, exploit customer inexperience, or guarantee returns or protection against losses.

10- Platforms cannot offer specific returns, direct customers toward particular crypto-assets, or provide benefits to those who refer new customers. Existing campaigns of this nature must end within 15 days.

11- Platforms must integrate their systems with MKK according to the technical infrastructure and timeline set by MKK for data transfer.

12- Platforms may only sell crypto assets that they hold in their wallets and cannot dispose of customer assets or funds for their own or third-party benefit.

13- Platforms are prohibited from engaging in crypto-asset lending, transactions equivalent to granting credit, and leveraged transactions. Platforms currently engaged in these activities must close open positions in a transition period without harming customers.

14- Platforms must ensure control over the keys to crypto-assets not stored in customers' own wallets by 8.11.2024.

15- If crypto assets are not stored in customers' wallets, platforms must gain control over the keys of these wallets by 8.11.2024.

The content of the newsletter has been prepared for general information purposes. If you want to learn more about compliance and legal advice, or if you want to be involved in compliance processes, consult your lawyer.