Türkiye is in the process of enforcing its first legal regulation on crypto assets.
The Turkish Parliament on Thursday cleared a Cryptocurrency Bill that will come into effect after President Recep Tayyip Erdogan’s approval, and publication in the Official Gazette.
The Bill addresses various aspects of crypto services, including the definition of crypto assets, and mandates broad obligations including licensing, market abuse prevention, and formal written contracts with customers.
The Capital Markets Board (SPK), Türkiye’s financial regulatory and supervisory agency, will be authorised to issue capital market instruments as crypto assets.
The SPK will also establish principles and guidelines for the classification of crypto assets, while the Scientific and Technological Research Council of Türkiye (TUBITAK) will set criteria for information systems and technological infrastructures.
The new regulation is also part of Türkiye’s efforts to comply with Financial Action Task Force (FATF) requirements, following its inclusion in the FATF "grey list" in 2021.
Those efforts bore fruit on Friday, with Türkiye being removed from the grey list, owing to strict measures that have now been adopted, addressing issues like money laundering.
Broad obligations and hefty fines
Under the new Bill, crypto platforms will have to obtain authorisation from the SPK to operate legally in the country. Service providers currently operating in Türkiye will have to apply for a licence within one month of the law’s enactment, or declare a decision to liquidate within three months.
Unauthorised providers will face three to five years in prison, and hefty judicial fines. If board members or other officials of a crypto service provider commit embezzlement, they will face eight to 14 years in prison and substantial fines.
Crypto providers must also implement and report measures such as seizures and further legal enforcement actions, and ensure that customer fund transfers are accessible and traceable by legal authorities.
Crypto ATMs, which allow conversions between cash and crypto assets, must also be terminated within three months of the law’s enactment. Non-compliant ATMs will be shut down by the authorities.
The SPK will designate independent institutions to conduct financial and information systems audits of crypto service providers.
