Turkey adopted a law on cryptocurrency

The Grand National Assembly of Turkey passed the first law on crypto assets in the country. The legislative proposal to amend the Capital Markets Act, which includes provisions on such matters as the definition of crypto assets and the granting of licences, was adopted and enacted by the General Assembly of the Turkish Grand National Assembly.

What will change the sector’s first legal regulation in this area?

Taxes:
There is no provision for taxation of investors. Only 1% of all revenue of the platforms that will provide services in Turkey (except the interest income for the previous year) will be paid to the Capital Markets Council (CMB)and 1% will be paid to the budget of TÜBİTAK platforms until the end of May of the respective year and recorded as income. 

Licensing Platforms:
One of the main points of the original regulation was the licensing process for platforms offering services in the country. To create and start operation of the platform will need to obtain permission from CMB. The current platforms must apply for a license to operate within one month of the effective date of the law. If the platforms do not want to obtain a license, they will have to submit an application for liquidation within 3 months without prejudice to the rights and interests of the clients.

The law will not apply to foreign platforms that do not provide services in the country and do not have a license. However, opening a workplace in Turkey, setting up a Turkish website, participating in any advertising and marketing activities directly or through persons/organizations located in Turkey, regarding the crypto-asset services offered by these platforms, without obtaining a license will be considered an unauthorized provision of crypto services. 

Natural or legal persons who are found to be engaged in crypto asset servicing without obtaining a permit will be sentenced to 3 to 5 years' imprisonment and a court fine from 2,500,000 lire to 5,000,000 lire

Seizure of crypto-assets:
Clients' funds and crypto assets cannot be seized due to debts of crypto asset providers. The assets of crypto service providers will not be seized because of customer debts, even in the case of public receivables. 

Listing of crypto assets:
The principles and provisions for listing crypto-assets will be defined by the CMB. However, the fact that crypto is included in the list of platforms does not mean that it is publicly approved. 

Supervisory authority:
Independent financial audit and audit of crypto providers' information systems will be carried out by independent audit organizations included in the CMB list. 

Penalties for platform owners:
If the chairman and members of the board of directors of crypto providers and other members of the company commit crimes of embezzlement, they will be sentenced to imprisonment from 8 to 14 years and a court fine equivalent to 2,500,000 lire.

Prohibition of use of electronic transaction devices:
Electronic transaction devices, known as ATMs, that allow customers to convert their crypto assets into cash or crypto assets will cease operations within three months of the effective date of the law. The ATMs that have not ceased operation will be closed by the competent authorities.