2024 Legal Status of NFTs and P2P in Turkey is clarified by the recent Resolution by Turkish Capital Markets on Turkish Crypto Assets Service Providers. In this context, a recent decision by Turkish Capital Markets dated September 19, 2024 requires a high level of attention of all practitioners including Turkish business lawyers
Introduction
It is beyond doubt that the adoption of the Law Numbered 7518 "known as the Turkish Crypto Law" revising the Capital Markets Law Numbered 6362 as of July 2, 2024 has a vital impact upon reshaping the FinTech environment in Turkey. The Turkish Capital Markets Board [the CMB] is the main authority to regulate further FinTech providers and all FinTech activities. This article is intended to investigate the recent legal change on the legal status of NFTs and Peer to Peer.
What is the meaning of Financial Technologies?
The term "FinTech" is used to refer to emerging electronic payment methodologies and systems such as electronic money institutions, payment institutions, digital banks, online insurance agencies, and crowdfunding platforms and blockchain such as crypto currencies. It is very significant to underscore at this juncture that the terms for crypto wallet, crypto asset, crypto asset storage service and crypto asset exchange platform as well as crypto assets service provider were made in Article 3 of the Law Numbered 6362 revised by the Law Numbered 7518.
For a comprehensive discussion on the FinTech Environment in Turkey, take a look at our article on FinTech Guide in Turkey
For more discussion for the importance of FinTech for banking and finance, take a look at our article on Banking and Finance Law in Turkey
What is the news for the 2024 Turkish Crypto Assets Service Providers by the Turkish Crypto Law?
Pursuant to the new version of Article 35/C of the Law on Turkish Capital Markets Numbered 6362, crypto service assets providers are obligated to keep customer cash in the banking account. Additionally the 7th paragraph of the same Article stipulates that
Cash and crypto assets belonging to customers are separate from the assets of crypto asset service providers. Cash and crypto assets of customers in the possession of crypto asset service providers, in any way, cannot be seized, pledged, included in the bankruptcy estate or injunctions can not be imposed on them due to the debts of crypto asset service providers, and the assets of crypto asset service providers cannot be seized, pledged, included in the bankruptcy estate or injunctions can not be imposed on them, even for public receivables due to the debts of customers.
What is the new Resolution for the 2024 Turkish Crypto Assets Service Providers by the Turkish Capital Markets Board?
The CMB made a new Resolution numbered i-SPK.35.B.1 dated September 19, 2024 and numbered 1484. The Resolution was published in SPK Bulletin dated September 19, 2024.
The Resolution identifies the standards for the accounts to be opened in the name of customers under Article 35/C. Any account to be opened in the name of customers cannot be used for purposes other than their intended purpose. Additionally, customer cash cannot be received by the platforms, cannot be delivered to the customer by hand and cannot be stored in any way with the platforms.
What are standards developed for NFTs and P2P by the Resolution for the 2024 Turkish Crypto Assets Service Providers?
The Resolution in question describes the meaning of Non-Fungible Tokens [NFTs] [nitelikli fikri tapu in Turkish] as "crypto assets that will be used to record the representation and ownership of digital assets, a non-replicable and unique nature". NFTs do not fall within the ambit of the listing principles set out in the Law on Capital Markets Law Numbered 6362 and the said Law does not apply to those only engaging in trade, initial sale and distribution, clearing and transfer and custody services in the name of these crypto assets.
In terms of Peer to Peer [P2P] [eşler arası], it is used to refer to digital marketplaces allowing the buying, selling and exchanging of crypto assets directly between direct|main users.
Trading on its own behalf but for the name of another person regularly for a P2P activity may be regarded as a commercial activity within the scope of unauthorized crypto asset service clauses.
Recent Progress for the 2024 Turkish Crypto Business Environment in Turkey
In Turkey there has been a broad range of developments for the improvement of financial technologies. As a first step, the digital participation banking system is accepted by Turkish lawmakers in Turkey.
As a second step, the recognition of digital wallets has also been completed by means of new regulation of the Central Bank of the Republic of Türkiye. In this way, a Digital Wallet Era in Turkey started.
As a third step, the 2024 New Electronic Submission System for Turkish Capital Markets was instituted by the Capital Markets Board of Türkiye.
Turkish policy-makers took a commitment of the full compliance of the emerging capital markets system in line with the Financial Task Force standards and principles designed for the prevention of money laundering and terrorist financing. Therefore, fourthly, the Law Numbered 7518 on Amendments to the Capital Markets Law Numbered 6362 has been enacted. The Law Numbered 7518 is regarded as Crypto Law of Turkey and enters into force following its publication in the Official Gazette dated July 2, 2024.
Take a look at our up-to-date article on the 2024 FATF Decision on Turkey
Fiftly, the first decision on the 2024 Announcement for the Rejected Crypto Asset Platforms was delivered by the Board dated 23 August 2024.
Last but not least, the Resolution by Turkish Capital Markets dated 19 September 2024 was published particularly in relation to the legal status of NFTs and P2Ps in Turkey.
Conclusion
Having regard to the above, it is worth reiterating that the Turkish FinTech environment is continuously reviewed and changed by Turkish law and policy makers. Nonetheless, much work needs to be done for the practice. The main reason is that even terminology for main components of FinTech instruments are newly articulated by the Turkish Capital Markets Board. Therefore, full-fledged investment advice by Turkish business lawyers is considered as a considerable component of FinTech crypto investments in Turkey for nearby future.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
