Overview of Recent Developments
On August 8, 2024, the Capital Markets Board of Turkey (the “Board”) issued a resolution, No. i-SPK.35.B (Resolution No. 42/1259), outlining the requirements for establishing platforms in the crypto-asset industry. This resolution, published in the Board’s bulletin (No. 2024/38), aims to clarify the conditions under which these platforms can operate.
This resolution follows the enactment of Law No. 7518, which amended the Capital Markets Law and came into effect on July 2, 2024, upon its publication in the Official Gazette (No. 32590). The Board also released an announcement on the same day, detailing the application procedures and necessary documentation for crypto-asset service providers looking to continue or begin their operations under this new legal framework.
The resolution also addresses the status of platforms that had previously submitted applications under the earlier announcement but failed to provide all required documents and information.
Conditions for Establishing a Crypto-Asset Platform
To receive authorization from the Board, platforms must meet several stringent conditions:
- Corporate Structure: The platform must be incorporated as a joint-stock company (anonim şirket) with shares that are registered and issued against cash.
- Capital Requirements: A minimum share capital of TRY 50 million must be fully paid in cash, and the platform’s shareholders’ equity must not fall below this amount. The Board may increase this minimum in future regulations.
- Articles of Association: The platform’s articles of association must comply with the provisions of the Capital Markets Law No. 6362 and related regulations. Additionally, the company’s trade name must include the phrase “crypto-asset trading platform.”
- Operational Scope: The platform’s activities must be strictly limited to crypto-asset trading, initial sales or distribution, clearing, settlement, transfer, and custody services. It cannot operate in any other industry outside of these specified activities.
- Management and Ownership: The platform must have a board of directors with at least three members, and its shareholding structure must be transparent and clear.
Application Process for Establishment
Platform founders are required to submit a comprehensive application to the Board. This application must include:
- The platform’s articles of association, drafted according to the required conditions.
- Documents proving that the founders and directors meet the legal requirements set forth by the Law and the Resolution.
- Additional documents and forms as specified in Annex 1 and Annex 2 of the earlier Announcement, along with any other documents that the Board may request.
Platforms that receive establishment approval must also apply separately for operating approval, following further guidelines that the Board will establish.
Implications for Existing Crypto-Asset Service Providers
The Resolution clarifies the status of platforms operating as crypto-asset service providers as of the effective date of Law No. 7518. Specifically, it defines these platforms as those with existing clients and/or client custody balances at the time of their application to the Board.
Applications from platforms that began operations but do not have clients or custody balances will not be considered, as they do not meet the legal requirements. Furthermore, applications missing critical information—such as details about information systems infrastructure, client asset protection, blockchain transaction processes, and risk management—will be rejected.
Platforms with less critical missing documents will have 15 business days to complete their applications.
Transition Period for Existing Platforms
Platforms that are included in the “List of Operating Companies” by the Board must comply with the new conditions by applying to the Board by November 8, 2024. These companies will be allowed to continue operations until the Board issues new regulations on operating conditions.
This resolution marks a significant step in regulating the burgeoning crypto-asset industry in Turkey, aiming to ensure transparency, security, and compliance across all platforms operating within this sector.
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