New Regulations for Cryptocurrency Investors in Türkiye

New regulations concerning cryptocurrency investors in Türkiye have come into force following their publication in the Official Gazette.

Establishment and Operating Principles

The “Communiqué on the Establishment and Operating Principles of Crypto Asset Service Providers” and the “Communiqué on the Working Principles and Principles and Capital Adequacy of Crypto Asset Service Providers,” prepared by the Capital Markets Board (CMB), were published in the Official Gazette.

According to the published circular:
– Cryptocurrency platforms can be established with a minimum capital of 150 million TL.
– Custody institutions require a minimum capital of 500 million TL.

Under the new regulation, cryptocurrency exchanges are prohibited from directly storing customer funds. Customer cash must be kept in special accounts at banks, distinct from the platform’s own assets. Specifically:
– 95% of cryptocurrencies stored outside of personal wallets must be held by custodians, while platforms can retain a maximum of 5%.

> “It is essential that 95% of the crypto assets that customers do not prefer to keep in their own wallets are kept in the custody institution in accordance with the provisions set out in the Communiqué. The maximum 5% portion that is not kept in the custody institution is kept in wallets on the platform.”

Additionally, cryptocurrency platforms are required to hold liquid reserves of at least 3% of customer assets.

Ban on Leveraged Trading

The recently published secondary regulations include a ban on leveraged transactions in cryptocurrency markets to protect investors from excessive risks and market fluctuations. Consequently, stock exchanges in Türkiye cannot offer leveraged trading to investors.

Reserve Requirement

Crypto asset service providers must undergo an independent audit of their information systems annually and maintain proof of reserve audits. Such audits are intended to enhance transparency and protect user rights.

Listing Criteria

Cryptocurrency exchanges in Türkiye will determine the assets they can list, following the principles in the circular. Exchanges are required to form a listing committee and to validate cryptocurrencies against specified conditions. Specifically:
> “Platforms are obliged to check the minimum elements to be written into smart contracts and to review the accuracy of the contracts according to the type and legal nature of each crypto asset whose initial sale or distribution they will mediate.”

Platforms cannot engage in the initial sale or distribution of crypto assets that do not meet the minimum listing criteria.

Listed Crypto Assets

ARTICLE 21 – Criteria for Listing Crypto Assets

1. Crypto assets listed must be eligible for custody institutions authorized by the Board and comply with various principles, including:
   a) Adherence to the principles in Article 16.
   b) No restrictions on issuance or trading imposed by authorities.
   c) No provision of unilateral extraordinary rights to project owners.
   d) Project owners must not be on national or international banned lists relevant to money laundering and terrorism financing.
   e) Assets must allow for storage in cold wallets.

2. Partnerships involving individuals or entities in positions of responsibility cannot list the crypto assets distributed.

3. Certain specified assets are excluded from listing principles.

*This is not investment advice.