After its boom in 2017, governments and investors around the globe could no longer ignore the expansion of cryptocurrencies, as a medium of exchange and/or investment. Legislative works on cryptocurrency have gained pace since then. In Turkey, cryptocurrencies have also become increasingly popular particularly after 2017.

Even though cryptocurrency is still not regulated in Turkey, several administrative authorities such as Banking Regulation and Supervision Agency ("BRSA"), Capital Markets Board of Turkey ("CMB"), and Financial Crimes Investigation Board of Turkey ("MASAK") have been tracking the developments and reflecting some ideas towards cryptocurrencies, subject to the limits of their powers conferred from current regulative framework.

Nevertheless, as there is no sanctions or enforcement against crypto assets trading and investment activities, lack of any regulation in this field does not implicate that cryptocurrencies are unlawful or prohibited. Indeed, many multinational crypto exchange platforms have incorporated subsidiaries in Turkey, in addition to recently founded Turkish crypto exchanges.

As the market grows and attracts significant volume of clients, i.e. investors, traders etc., rumors have spread in the sector that a regulatory regime, through a communiqué of the CMB, is expected to be introduced within 2020. Therefore, it has become necessary to take a snapshot of crypto business in the light of current legal status under Turkish law.

I. Legal Status of Cryptocurrencies

As elaborated below, there are several legal concepts and definitions, i.e. electronic money, foreign currency, capital markets instruments, security or commodity, under Turkish law that may be considered as covering cryptocurrencies. However, these concepts are not applicable directly to cryptocurrencies and none of regulatory authorities have, indeed, considered cryptocurrencies are within the scope of their regulatory and supervision powers.

Assessment Regarding E-Money:

Pursuant to the Law on Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions No. 6493 ("Payment Law"), electronic money is defined as a monetary value which is (1) issued in exchange for funds (2) by an electronic money issuer, (3) stored electronically and (4) can be used to make payment transactions with persons other than the issuer. Since many cryptocurrencies are not issued by a central institution and they are not backed by a reserve asset, they shall not be included in the scope of electronic money.

Indeed, BRSA, which was the main regulatory body concerning payment and e-money institutions until the end of 2019, published a press release1 on November 25, 2013 on Bitcoin's legal status. In its public statement, the BRSA announced that Bitcoin was not classified as an electronic money by stating "...Bitcoin, known as a virtual currency that is not issued by any public or private entity and is not guaranteed for its equivalent, is not considered as electronic money within the scope of the Law due to its current structure and functioning; and therefore, it is not possible to supervise and audit within the framework of the Law...".

With the recent amendments on Payment Law entered into force in 2020, the regulatory and supervisory powers for payment and e-money sector has been assigned to the Central Bank of Republic of Turkey ("CBRT"). To date, there has not been any signals received from the CBRT regarding any shift from the BRSA's approach. Thus, it may be considered safe to exclude crypto currencies, at least the ones that are not pegged to any value, from the scope of e-money regulations.

On the other hand, there is risk for stable crypto tokens, such as Tether, that one can construe as carrying features similar with electronic money structures, particularly if users can also use them as a medium of payment. Since BRSA's and the CBRT's inertia for enforcing their authorities under the Payment Law, nevertheless, it could be speculated that their approach also excludes stable crypto tokens from the scope of the Payment Law.

Assessment Regarding Foreign Exchange:

Pursuant to the Decision on Protection of Turkish Currency's Value No. 32 ("Decision No. 32"), foreign exchange is defined as "any type of account, document or medium enabling payment with foreign currencies, including banknote". Nonetheless, this definition is insufficient for addressing cryptocurrencies as it is disputable whether cryptocurrencies could be deemed as a foreign currency.

While the Decision No. 32 does not consist of any express definition for the concept of foreign currency, Article 5/1 provides that "value of foreign currencies shall be determined through procedures set by the Central Bank of Republic of Turkey ("CBRT")." That being said, silence of the CBRT towards cryptocurrencies could be interpreted as not considering them as foreign currency.

Assessment Regarding Capital Markets Instruments:

Pursuant to Article 3(ş) of Capital Markets Law No. 6362 ("Capital Markets Law") capital markets instruments are defined as "securities and derivatives as well as other capital markets instruments, including investment contracts." In other words, even though the definition clearly defines securities and derivatives as capital markets instruments, the CML confers the ultimate power to the CMB to designate other capital markets instrument. Therefore, the CMB is entitled to designate crypto assets as capital markets instruments, if it sees necessary.

Accordingly, since features of crypto assets do not match with the Capital Markets Law's securities definition, which covers "(i) shares, other shares-like assets and depository certificates related to such shares and (ii) borrowing instruments or debt instruments based on securitized assets and incomes, and depository certificates for such securities, excluding money, check, policy and bond" or derivatives, they can only be deemed as capital markets instruments if the CMB decides so.

In this framework, cryptocurrencies should also not be considered as capital markets instruments under the current regulatory framework; but, the CMB has the power and authority to determine crypto assets as capital markets instruments under the Article 3(ş) of Capital Markets Law.

II. Approaches of Regulatory Authorities

Regardless of aforementioned regulatory gap, some regulatory authorities in Turkey have expressed their interpretations regarding cryptocurrencies, as elaborated below.

Banking Regulation and Supervision Agency

As above-mentioned, the BRSA issued a public statement in 2013, in which Bitcoin, not all crypto assets, was considered out of the scope of Payment Law.

Following the statement, the BRSA has not exercised its enforcement powers against crypto exchanges nor crypto token issuers. Therefore, it can be argued that the BRSA does not assess trading and investment services offered with crypto mediums as a violation of licensing requirements regulated by Turkish banking, card and payment legislations.

Capital Markets Board of Turkey

Even though cryptocurrency exchange business is not explicitly mentioned under capital markets law, the CMB has signaled that it tracks the developments of the sector a few times.

First, the CMB's Research Department published a study named "Cryptocurrencies, Bitcoin" in December 2016 ("Study"). Within the Study, cryptocurrency concept is defined as "digital value enabling secure transactions via cryptography/encryption and issue of additional virtual currency supply".2 Despite the Study recognizes cryptocurrencies as digital and virtual currencies, it also remarks their differences. While non-crypto virtual or digital tokens are pegged to national legal tender and can be supervised by central governmental authorities, cryptocurrencies, for example Bitcoin, are not supervised by any central body.

Further in the Study, the views of different economic perspectives regarding the taxation of cryptocurrencies are discussed and it has been considered that Turkey should follow the developments regarding Bitcoin in a cautiously optimistic manner along with the other jurisdictions. It has also been indicated that Turkey may be able to generate revenue from the Bitcoin market if certain incentives are given after assessing all risks. More concretely, the Study proposes introduction of a legislation to render Turkey a leading country within the crypto industry, in its conclusion section.

Although the Study does not constitute the CMB's official opinion towards the market, it is suggested that a welcoming approach could be adopted. However, in September 2018, the CMB has published an announcement in its weekly bulletin numbered 2018/42 and dated September 27, 2018. In the article titled "Announcement on Digital Asset (Token) Sales (ICO)" it has been stated that:

"...Whether the token sales practices that have similar aspects and differences with public offering and crowdfunding activities will fall within the scope of the CMB's regulation or not will depend on the case. All the necessary administrative and criminal measures shall be applied by the CMB for the unauthorized activities under the name of crowdfunding before the regulations to be made in this regard take effect. At this stage, the sale of cryptocurrencies being realized under the name of crowdfunding should not be respected by the investors..."

In other words, the CMB has announced that it may impose administrative and criminal sanctions against crowdfunding activities or public offerings realized through ICOs. Nonetheless, to date, the CMB has not exercised its sanctioning powers for offering crypto asset based investment, funding or trading services.

Financial Crimes Investigation Board of Turkey

In 2014, the MASAK published its Suspicious Transaction Reporting Guides for several obliged parties, such as banks and intermediary institutions of capital markets etc. for reporting such transactions. These guidelines provide types of suspicious transactions in order to (1) ensure that the obliged parties have a common attitude, understanding and cooperation against the risk of being exploited for laundering proceeds of crime and terrorism financing, and (2) assist the obliged parties for identifying suspicious transactions. Among them, the guidelines prepared for banks3 ("Guidelines") included references to Bitcoin. In detail, the Guidelines listed all transactions that are carried out for "transferring money from the customer accounts to intermediary entities, which sell bitcoin, for the purposes of buying bitcoin" as a suspicious transaction and therefore expected them to be notified to MASAK.

Having said that, in September 2019, MASAK updated its Guidelines to provide narrower and specific circumstances for a transaction to be considered as suspicious. The examples of suspicious crypto currency transactions within the Guidelines are as follow:

T-001- 3.47: "Transfer from customer accounts to domestic and international crypto currency exchanges or other real persons' or legal entities' accounts for the purposes of buying crypto currency, in frequency and amounts that does not fit the customer's profile".

T-001- 3.61: "Transfer to customer accounts as a result of a crypto currency sale, whose origin is unknown or suspected to be inapt with the relevant person's financial profile".

Accordingly, it can be argued that transactions in connection with cryptocurrency exchanges with an identified origin and with fitting frequency and amounts to relevant the customer profile may not be considered as suspicious transactions by MASAK.

Information and Communication Technologies Authority

Although it could be argued that the jurisdictional scope of the Information and Communication Technologies Authority of Turkey ("ICTA") does not necessarily cover cryptocurrencies, the ICTA published a research study on cryptocurrencies in September 2020 ("ICTA Study"). Within the ICTA Study, cryptocurrencies are "digital or virtual currencies that uses cryptography for ensuring security".

The ICTA Study provides some noteworthy industry information. Accordingly,

  • Turkey is the 14th ranked country throughout the globe for number of cryptocurrency traders, which constitutes a 2.14% global share;
  • Turkey has more than 2.4M cryptocurrency holders as of 2020;
  • Bitcoin, Ripple, Digibyte, Bitcoin Cash and Stellar Lumen are the top five cryptocurrencies invested in Turkey.

Moreover, the ICTA Study refers to the speculations that the CMB should be authorized for supervision and regulation of cryptocurrencies and further sets forth that the CMB's prospective regulations will support the market's growth and increase consumer trust.4 That said, mentioning of the potential regulation to be issued by the CMB regarding cryptocurrencies within the ICTA Study could be interpreted as a sign that preparation works on such a regulation are close to be materialized.

III. Prospective Legal Framework

Even though there is not any publicly available information on preparation of a regulation, which specifically addresses crypto assets, the rising interest of both the traders and intermediary service provides to the sector has created an anticipation for acceptance of regulation, which specifically addresses crypto assets. Indeed, based on hearsay information spread among the industry, the CMB may issue a secondary legislation in the following months, which is currently in progress. While there is not any disclosed draft, according to the speculations, the upcoming regulation may predominantly include the following content:

  • Some of the Crypto assets will be defined as capital market instruments within the scope of Capital Markets Law;
  • Trading platforms of crypto assets will be required to obtain an activity license from the CMB;
  • Licensed trading platforms may potentially be required to follow an extent of data localization requirements, which may consist of on-soil requirement for their information systems and data precluding them to engage with cloud service providers abroad, or at least to hold information and documents related with the services, traders and transactions under their own possession;
  • Licensed trading platforms will be required to comply with other standards regulated for capital markets intermediary institutions, such as (i) types of services that trading platforms are entitled to provide, (ii) requirements regarding incorporation, organization and business plan, (iii) qualification for founders and officials of trading platforms, (iv) requirements regarding fit and proper tests, (v) requirements regarding notifying the CMB, (vi) requirements on customer services and terms of use and (vii) specific rules regarding derivative instruments and leveraged transactions.


1. (last access date: 16.09.2020)

2. Dr. Abdurrahman Çarkacıoğlu, the Study, p.8. (last access date: 16.09. 2020)


4. Research Report on Cryptocurrency, Information and Communication Technologies Authority's Department of Industry Research and Strategy Development, 2020, p.22. (last access date: 16.09.2020)

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