Understand Web3 Legal - Turkey's New Limitations - Issue 15

The Turkish Capital Markets Board (SPK) recently issued a significant directive impacting the cryptocurrency ecosystem, causing considerable overnight discussions. Below is a brief overview of the key takeaways from the new regulatory framework and their implications for platforms and users.

Key Changes in SPK's Directive for Crypto Ecosystem

1. Clear Customer Account Identification: All accounts opened on behalf of customers must be explicitly identified as belonging to specific customers. This aims to prevent the use of "pooled accounts" by platforms, ensuring that customer funds are segregated and cannot be misused.
2. No Cash Transactions: Cash transactions will no longer be permitted. All transfers must occur through banks or authorized institutions. This change further formalizes the separation of customer and platform funds, aligning crypto platforms with regulations in traditional financial markets.
3. Restrictions on Orders: Orders can now only be placed through registered means such as official websites, mobile apps, or through recorded phone lines. Platforms like WhatsApp and Telegram are now prohibited for placing trades.
4. Ban on Cryptocurrency Exchanges Acting as Bureaus: The directive prohibits exchanges from operating in a manner similar to traditional currency exchange bureaus. This regulation could limit the on/off ramps that many users have relied on.
5. NFTs and In-Game Tokens: These are currently exempt from the scope of the new regulations, but if listed on platforms, it must be made clear to users that they are not regulated by the SPK. This move could encourage more transparency but also highlights the need for further classification of different types of tokens.
6. Closure of P2P Marketplaces: Peer-to-peer crypto marketplaces are required to cease operations by November 8, 2024. The effectiveness of enforcing this ban and its implications for users remains uncertain, but it raises questions about the future of decentralized exchange models.
7. Tokenization Allowed with Conditions: Tokenization of assets has received a cautious green light. However, listing of these tokens will be subject to strict compliance with relevant institutional rules, reflecting the complex nature of real-world asset tokenization.
8. Prohibition on Leveraged and Loan-Based Transactions: Platforms can no longer offer leveraged trading or allow margin loans. This is expected to face resistance, particularly from platforms that heavily rely on these services for revenue.

Conclusion

The SPK's new rules introduce a more stringent and formal framework for cryptocurrency platforms in Turkey, signaling a shift towards greater oversight. While the directive provides much-needed clarity, certain areas such as the role of NFTs, P2P marketplaces, and tokenization will likely require further development. This is a critical moment for platforms to adapt to the new regulations while ensuring user protection and operational transparency.

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