The Turkish Parliament has officially enacted a landmark bill aimed at regulating the burgeoning cryptocurrency sector, a move hailed as a significant step towards ensuring transparency and security in the industry. The “Bill on Amendments to the Capital Markets Law,” passed by the Parliament’s General Assembly, introduces a framework to oversee the operations of crypto asset service providers within Turkey.
Regulatory Oversight and Licensing
Under the new law, all crypto asset service providers must secure authorization from the Capital Markets Board (SPK) prior to establishment and operation. The SPK is empowered to regulate the crypto ecosystem, applying criteria set by the Scientific and Technological Research Council of Turkey (TÜBİTAK) regarding information systems and technological infrastructure.
Key definitions, such as “crypto asset,” “crypto asset service provider,” and “wallet,” have been formally incorporated into the Capital Markets Law. The licensing process for platforms offering crypto services in Turkey is a major focus of the new regulations. Platforms are now mandated to obtain SPK permission to legally operate.
The SPK is granted extensive regulatory powers, including the authority to issue specific and general directives, implement measures, and impose sanctions. Financial audits and independent reviews of information systems for crypto asset service providers will be conducted by firms approved by the SPK, according to Anadolu Agency (AA).
Enforcement and Penalties
The law stipulates severe penalties for non-compliance. Individuals and officials of legal entities operating as crypto asset service providers without proper authorization face imprisonment ranging from three to five years, alongside judicial fines between 5,000 to 10,000 days.
Service providers found guilty of misappropriating funds or assets, including cryptocurrencies, will be subject to imprisonment terms of eight to fourteen years and fines up to 5,000 days, in addition to mandatory compensation for any damages incurred.
Future Taxation Considerations
Notably, the new legislation does not address the taxation of crypto assets. This issue is expected to be tackled through separate laws or regulations in the future.
Compliance Deadlines for Existing Platforms
Existing crypto asset service providers are required to apply to the SPK within one month of the law’s enactment. Platforms that fail to comply must cease operations and initiate liquidation processes within three months. This measure aims to foster a transparent and trustworthy environment in Turkey’s crypto sector.
Market Impact and Future Prospects
Cryptocurrencies enjoy immense popularity in Turkey, which ranks among the world’s largest crypto trading markets. The implementation of this regulatory framework is anticipated to enhance market stability and protect consumers.
Kenneth Farrugia, CEO of the Malta Financial Services Authority (MFSA), commented on similar regulatory initiatives, saying, “Our focus on being an effective and efficient regulator has strengthened our role in the financial services sector, both in Malta and internationally. We will continue to achieve our mission and uphold the highest standards of regulation and supervision with the support of our dedicated team, industry partners, and stakeholders.”
Jesmond Gatt, Chairman of the MFSA, added, “We understand that financial services are not merely about numbers and transactions; they are about people’s lives, aspirations, and futures. Our regulatory framework is designed to protect consumers, ensuring they have access to transparent and reliable financial products and services.”
Conclusion
The passage of the “Bill on Amendments to the Capital Markets Law” marks a pivotal moment for Turkey’s cryptocurrency market. By establishing a rigorous regulatory framework, the Turkish Parliament aims to ensure the industry’s long-term stability and integrity, positioning Turkey as a leader in digital finance regulation.
