Regulation on the crypto-asset market in Turkey

Turkey is one of the leading countries in cryptocurrency adoption, ranking 11th globally according to Chainalysis data presented in The 2024 Global Adoption Index. It surpasses all EU countries, including Germany (21st place), Poland (24th place), and Latvia (79th place). This dynamic is particularly striking given that Turkey began regulating the crypto-asset market by banning banks from using cryptocurrencies in payments.

Turkey showcases remarkable flexibility in cryptocurrency regulation, gradually transitioning from restrictions to fostering a favorable environment for their development.

How the Turkish Crypto-Asset Market is Regulated

Turkish legislation on crypto-assets is fragmented and comprises several acts:

• ?demelerde Kripto Varl?klar?n Kullan?lmamas?na ?li?kin Y?netmelik ?(“Regulation on the Prohibition of Using Cryptocurrencies in Payments”), published by the Central Bank of the Republic of Turkey (Türkiye Cumhuriyet Merkez Bankas? – “TCMB”).
• Sermaye Piyasas? Kanunu (“Capital Markets Law”), amended on July 2, 2024, introducing licensing for cryptocurrency companies and ensuring transparency in their operations.
• Su? Gelirlerinin Aklanmas?n?n ?nlenmesi Hakk?nda Kanun (“Law on the Prevention of Laundering Proceeds of Crime”).
• Su? Gelirlerinin Aklanmas?n?n ve Ter?rün Finansman?n?n ?nlenmesine Dair Tedbirler Hakk?nda Y?netmelik (“Regulation on Measures to Prevent Money Laundering and Financing of Terrorism”), amended on December 25, 2024.

These regulatory acts govern the Turkish cryptocurrency market, establish requirements for financial security, protect consumer rights, and prevent crypto-related crimes.

Market Growth Despite the Ban

Since 2021, Turkish banks have been prohibited from using cryptocurrencies in payments, either directly or indirectly. However, this has not prevented banks from allowing clients to interact with cryptocurrency platforms and organisations through partner services.

Subsequent steps in this area demonstrate Turkey’s intention to minimize existing and potential risks in the crypto-asset market. Turkey aligns with international standards, particularly the recommendations of FATF and Regulation 2023/2114 (“MiCA”), enhancing transaction security requirements and crime prevention mechanisms.

Since 2021, individuals have been able to open bank accounts and conduct other operations through remote identification (Article 6/A Su? Gelirlerinin Aklanmas?n?n ve Ter?rün Finansman?n?n ?nlenmesine Dair Tedbirler Hakk?nda Y?netmelikte 24.02.2021 tarih ve 3580 say?l? Cumhurba?kanl??? Kara).

According to the Ministry of Securities and Finance in 2023, legal entities registered in the commercial registry gained the ability to open accounts in banks, payment institutions, electronic payment institutions, brokerage firms, and other financial organisations through remote identification.

Despite the restrictions, Turkey’s crypto asset market continues to grow, driven by international integration and innovative regulatory approaches.

Requirements for Crypto-Assets Service Providers

The Capital Markets Law, as amended by Law №. 7518 dated July 2, 2024, is among the most significant legal acts in this field.

The latest amendments define crypto-assets as “intangible assets that can be created and stored electronically using distributed ledger technology or similar technology, disseminated through digital networks, and capable of representing value or rights”.

The term “Сrypto-asset service provider” is interpreted broadly and includes:

• Platforms.
• Organisations that provide custodial services for crypto-assets.
• Other organisations designated to offer services related to cryptoassets, including the initial sale or distribution of cryptoassets in accordance with provisions adopted under this Law.

The new regulations prohibit foreign cryptocurrency service providers from operating in Turkey unless they establish a physical presence in the country. Crypto asset service providers based abroad must cease operations involving individuals residing in Turkey, as specified in Article 99/A (1) of the Capital Markets Law.

Principles Regarding the Activities of Crypto Asset Service Providers, as Well as the Transfer and Storage of Crypto Assets are established (Article 35/C of the Capital Markets Law):

• Contracts between crypto-assets providers and clients must be concluded in writing or remotely via electronic means of communication, with the possibility of client identification.
• A listing procedure for crypto-assets intended for sale or distribution on platforms must be developed.
• Crypto-assets prices on platforms are freely determined.
• Disputes between platforms and their clients are resolved under general legal principles.
• The platform’s license does not guarantee the public security of transactions.
• Records concerning clients’ crypto-assets must be stored securely, be accessible, and traceable.
• Clients’ crypto-assets should be stored in their own wallets or in banks, should the client not wish to store them independently.
• Client funds and crypto-assets must be separated from the provider’s assets and cannot be confiscated.
• Principles for investment consulting and crypto-asset portfolio management are established.
• A mandatory requirement is that all crypto-assets service providers operating in Turkey must obtain an authorisation certificate from the Capital Markets Board of Turkey (Sermaye Piyasas? Kurulu – “SPK”). Banks require permission from the Banking Regulation and Supervision Agency.

According to Article 35/B(1) of the Capital Markets Law, “the SPK is authorised to establish the main principles and requirements for the establishment, partners, managers, and capital of platforms, as well as other aspects of their activities”.

On August 8, 2024, SPK published Bulletin No. 2024/38, which includes Principal Decision № 42/1259. This document outlines the conditions for creating platforms, requirements for founders, partners, and managers, and necessary matters for submission to the board.

It has been determined that platforms must have a sufficiently strong financial and organisational structure capable of investing in information technologies and covering potential risks.?

Requirements for the process of establishing platforms (Section E):

To obtain license from SPK, platforms must adhere to the following requirements (Subsection A):

• Organisational Form: Platforms must be registered solely as joint-stock companies (Anonim ?irket).
• Shares: All shares must be nominative and issued exclusively for cash.
• Capital: The minimum statutory capital is 50 million Turkish lira, fully paid in cash. The equity must not be less than this amount. In the future, the minimum capital requirements may be increased through additional regulations.
• Articles of association: The platform’s activities must be limited to cryptocurrency operations, and its articles of association must comply with the law.?
• Name: The platform’s name must clearly indicate that it provides cryptocurrency trading services.
• Management: The board of directors must consist of at least three members.
• Transparency: Platform owners must ensure a transparent shareholder capital structure.
• Compliance: The platform must comply with the provisions of the law and regulations applicable to both the platform and its founders.

Founders and partners of platforms must meet the following requirements (Subsection B):

• Financial Reputation: Founders and partners:Cannot be bankrupt or undergoing restructuring.Must not have ties to prohibited or liquidated financial institutions.
• Criminal Record: They must not have criminal convictions related to fraud, corruption, money laundering, terrorism financing, or other similar serious offenses.
• Compliance with Requirements: Founders and managers must possess the necessary reputation, integrity, and financial stability.

• They must not have been involved in violations that led to the revocation of licenses for companies they previously worked for.
• Control and Ownership: Individuals who control or own more than 50% of the profits or shares must meet the same criteria.
• Legal Entities (Partners): Legal entity partners must comply with these requirements if their shares exceed 10% or give them the right to represent the company on the board.

Managers, including the CEO and board members, must meet all requirements (except financial stability). The majority of board members must have higher education. Non-compliance requires such individuals to sell their shares within six months to those who meet the criteria. These provisions ensure that founders, partners, and managers of platforms have proper reputation, financial stability, and professional competence.

To undergo the authorization procedure, SPK requires (Subsection С):

• The articles of association should be prepared in accordance with the establishment conditions.
• Documents confirming the compliance of founders and managers with the conditions stated in Subsection B.
• Forms and documents listed in Appendices 1 and 2.

SPK may request additional documents or information if necessary. Information about applicants is publicly available and is published by SPK in the Operator Registry.? This list currently includes 79 companies, including well-known names like Binance, Whitebit, Okx, and Kucoin.?It is important to note that inclusion in this list does not necessarily mean that these companies are authorized to provide services.

Amendments of December 25, 2024: Enhanced Disclosure Requirements

Effective from February 25, 2025, new anti-money laundering measures will come into force according to? SU? GEL?RLER?N?N AKLANMASININ VE TER?RüN F?NANSMANININ ?NLENMES?NE DA?R TEDB?RLER HAKKINDA Y?NETMEL?KTE DE????KL?K YAPILMASINA DA?R Y?NETMEL?K (“Regulation on Measures”). These amendments provide for the mandatory collection of a minimum set of personal data.?

In reports on cryptocurrency asset transfers made through cryptocurrency service providers, the following information about the sender and recipient must be provided:

• Name and surname for natural entities; for legal entities — name; for other legal entities and organisations without legal entity status — full name.
• Wallet address, or if the wallet address is unavailable — reference number of the transaction.

For cryptocurrency asset transfer transactions of amounts 15,000 Turkish Lira or more, equivalent approximately to 425 USD, the following additional information must be provided: address, place and date of birth, or client number, citizen ID number, passport number, tax number, etc. — one of the pieces of information that allows for the identification of the sender. This information must be provided for these types of transactions, and its accuracy must be additionally verified.

These steps are designed to enhance trust in Turkey’s cryptocurrency market while minimizing financial risks.

Do You Have to Pay Taxes?

Despite proposals to introduce a 0.03% tax, cryptocurrency transactions in Turkey are not specifically taxed.

The exchange rate will remain unchanged. In an interview with ECONOMY, Finance and Treasury Minister Mehmet ?im?ek said that stock market and cryptocurrency taxes are not on their agenda and that they do not have a tax package to increase or decrease the overall tax rates.?

Conclusions

Turkey demonstrates a balanced approach to cryptocurrency market regulation. The prohibition on crypto payments coexists with favorable conditions for trading and storage. Zero taxation, transparent licensing, and enhanced security measures make the market attractive for investors and users.?

By actively adopting international standards, Turkey lays the groundwork for the gradual lifting of restrictions and further integration of financial technologies.

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Manimama Law Firm provides a gateway for the companies operating as the virtual asset wallet and exchange providers allowing to enter to the markets legally. We are ready to offer an appropriate support in obtaining a license with lower founding and operating costs. We offer KYC/AML launch, support in risk assessment, legal services, legal opinions, advice on general data protection provisions, contracts and all necessary legal and business tools to start business of virtual asset service provider.

The content of this article is intended to provide a general guide to the subject matter, not to be considered as a legal consultation.