The Turkish Parliament (TBMM) has passed a comprehensive bill introducing new regulations for crypto asset service providers. This move, encapsulated in the “Bill on Amendments to the Capital Markets Law,” aims to ensure the legitimacy, security, and transparency of the burgeoning crypto market in Turkey, setting a precedent for strict compliance and severe penalties for non-adherence.
According to the new regulations, all crypto asset service providers must obtain authorization from the Capital Markets Board (SPK) before establishing and operating their businesses. This authorization is contingent upon meeting specific criteria set by the Scientific and Technological Research Council of Turkey (TUBITAK). Failure to secure this permission can result in imprisonment for up to five years.
Under the new law, the SPK has been granted extensive regulatory powers. It can now regulate digital asset transactions, make regulatory decisions, and apply various measures and sanctions. Additionally, the SPK will dictate the terms, scope, and minimum requirements of contracts between digital asset service providers and their clients, ensuring a robust regulatory framework.
Crypto platforms must adhere to a strict listing procedure for determining which assets can be traded or initially offered. These procedures must align with SPK’s principles and regulations. Unauthorized operation of crypto services is met with harsh penalties, including imprisonment ranging from three to five years and substantial judicial fines, emphasizing the government’s commitment to regulating this sector.
Strict Penalties for Crypto Misuse
The bill also addresses situations where service providers misappropriate funds or assets. Individuals found guilty of such actions face imprisonment of eight to fourteen years, along with heavy fines. If the crime involves deceit to conceal embezzlement, the penalty escalates to fourteen to twenty years in prison. These measures are designed to protect investors and maintain trust in the market.
Further penalties are imposed on individuals who misuse the resources of revoked crypto asset service providers for personal or third-party gain. Such offenses carry prison terms of twelve to twenty-two years, underscoring the severity of misusing financial resources within this industry. The judicial fines in these cases cannot be less than three times the damage caused, ensuring significant restitution.
Market conduct is also strictly regulated. Prices on crypto platforms are to be freely determined, but platforms must ensure transactions are reliable, transparent, efficient, stable, fair, honest, and competitive. This includes establishing systems to monitor and prevent market-disruptive actions, and platforms are required to report any such actions to the SPK.
To maintain transparency, digital asset service providers must securely and accessibly keep records of customer crypto asset transfers. Customers’ assets should be held in their wallets to protect individual investments, not mixed with the platform’s funds.
The SPK will regulate investment advisory and portfolio management for digital assets, issuing certificates to compliant service providers. Banks engaging in these activities need approval from the BDDK to ensure coordinated regulation across financial sectors. This bill marks a significant step in Turkey’s crypto market regulation, emphasizing financial integrity and investor protection.
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