Crypto Asset Issuers under Turkish Law

The recent amendments to the Turkish Capital Markets Law (Law No. 6362) have introduced regulations that, while not directly detailing the obligations of crypto asset issuers, outline significant frameworks affecting their operations. These changes reflect Turkey’s approach to integrating crypto assets within its financial regulatory landscape, emphasizing compliance, transparency, and technological oversight.

Issuance and Tracking of Crypto Assets

According to Article 2 of the amended Capital Markets Law, financial instruments can be issued as crypto assets and tracked in electronic environments provided by crypto asset service providers. The law permits these assets to be registered electronically, and these electronic records are considered definitive for tracking rights, asserting claims against third parties, and transferring ownership. This approach signals a shift towards embracing digital technologies in traditional financial processes, positioning crypto assets as a legitimate form of financial instrument within the capital markets.

Authority of the Capital Markets Board (CMB)

The Capital Markets Board (CMB) is granted broad authority to establish the principles governing the issuance and tracking of crypto assets in electronic environments. The CMB is also empowered to mandate integration between electronic records of crypto assets and the Central Securities Depository (Merkezi Kayıt Kuruluşu – MKK) system. This regulatory oversight ensures that crypto assets are subject to similar scrutiny and tracking mechanisms as traditional securities, enhancing market integrity and investor protection.

Issuance Procedures

Article 35/B of the Capital Markets Law highlights that the CMB will regulate the processes for buying, selling, initial offerings, distribution, exchange, transfer, and custody of crypto assets on platforms. This provision indicates that crypto asset issuers must comply with specific rules set forth by the CMB when conducting their activities through platforms, whether for initial sales or subsequent trades. Such regulation aims to create a controlled and transparent environment for crypto asset transactions, reducing the risks of fraud and market manipulation.

Role of TÜBİTAK and Other Institutions

The law incorporates a role for the Scientific and Technological Research Council of Turkey (TÜBİTAK) and other relevant public institutions in evaluating the technological aspects of crypto assets. Articles 35/B and 35/C allow the CMB to seek expert opinions from TÜBİTAK or other relevant authorities regarding the technological suitability of crypto assets intended for issuance. This inclusion underscores the importance of technical compliance and the use of robust technologies in the crypto asset market, providing an additional layer of validation before assets are made available to investors.

Regulatory Actions and Sanctions by the CMB

The CMB is authorized to establish rules for the issuance and distribution of crypto assets that grant specific rights akin to traditional financial instruments. The CMB also has the power to impose sanctions on issuers and service providers that fail to comply with these rules. This regulatory framework ensures that crypto asset issuers adhere to high standards of conduct, transparency, and accountability, aligning their operations with broader capital market regulations.

Conclusion

While the Turkish Capital Markets Law does not provide a comprehensive regulatory framework specifically targeting crypto asset issuers, the amendments create a structured environment that affects their activities. Crypto asset issuers are required to operate within the guidelines established by the CMB, comply with technical and legal standards, and submit to regulatory oversight that aligns their practices with those of conventional financial markets. As Turkey continues to develop its approach to crypto asset regulation, issuers will need to navigate a complex but increasingly clear set of rules designed to safeguard market integrity and investor interests.