With the increase in the use of blockchain in various sectors, crypto assets have begun to gain a significant place in country economies as alternative financial assets. When crypto-assets first started to become popular, there was a perception that these assets were immune from the legal order, due to the framework of the "code is law" principle. Over time, it has become clear that crypto assets are also subject to legal rules. However, the regulatory strategies adopted by countries regarding crypto assets developed differently from each other.
Today, we can encounter various approaches to the regulation of crypto assets: Countries that adopt a “wait-and-see” approach prefer to decide whether to regulate or not by waiting for the technology to develop and become widespread, rather than acting proactively. Some other countries are trying to determine how existing rules will be applied to crypto assets, choosing to continue with the regulations in place. Countries in the third group find it appropriate to enact new rules specific to the structure of crypto assets, considering their characteristics.
It is not possible to say that a uniform regulatory framework has emerged in countries that have chosen to make new regulations regarding crypto assets. While cryptocurrency mining and trading are banned in China, El Salvador has accepted Bitcoin as a legal currency. Apart from this, cryptocurrencies and other crypto assets appear to be classified in different ways in terms of legal and tax purposes. In many countries that choose to regulate crypto assets, the definition and classification of crypto assets and the establishment conditions of crypto asset service providers are regulated. Apart from this, determining the procedures for anti-money laundering and terrorism financing that must be followed in crypto-asset markets is among the issues that many countries prioritize.
Original creative works are protected without the need for registration in any registry. However, rights holders can voluntarily register their works in copyright registries as proof of ownership. In this way, it can be determined that the protection is justified, and the management of copyrights is facilitated. Blockchain solutions can ease both users' access to digital content and the identification of actors involved in the process from the moment this content is created until it becomes publicly available.
Blockchain technologies can also facilitate the automation of processes and systems maintained by copyright collective management organizations (CMOs) and access to information by potential users. Apart from this, as has been brought to the agenda, especially in terms of NFTs, blockchain can facilitate the calculation of royalties to be obtained from users and the determination of how these royalties will be distributed among different rights holders.
It is also possible for intellectual and industrial property rights and related rights to be tokenized and used to finance artistic projects.
The regulation of crypto assets is closely monitored not only by national authorities and lawmakers but also by international institutions, organizations, and platforms. Examples of these organizations are the World Economic Forum (WEF), the Financial Stability Board (FSB), the International Monetary Fund (IMF), the World Bank (WB), the Organization for Economic Co-operation and Development (OECD), the International Organization of Securities Commissions (IOSCO) and the Financial Action Task Force (FATF) can be pointed out. These institutions and organizations regularly share their reports on crypto assets with the public. For example, the Financial Stability Board, which published its last report in July 2023, published nine framework recommendation principles for crypto-assets to be regulated uniformly by states, considering their cross-border nature.
Another indicator that 2023 is a significant year in point of crypto asset regulations is the adoption of two regulations on this subject in the European Union. Markets in Crypto Assets (MiCA) Regulation and Transfer of Funds Regulation (TFR) were published in the European Official Gazette on 9 June 2023. MiCA sets out a comprehensive framework for the regulation of crypto asset markets by regulating crypto asset issuers and crypto asset service providers across the European Union. The Fund Transfer Regulation requires that crypto asset transfers carried out through crypto asset service providers be accompanied by party information.
There was no legal regulation regarding crypto assets in Turkiye until 2021. There were warnings and announcements shared with the public by BRSA and CMB, especially about crypto asset offerings known as Initial Coin Offerings (ICO).
In the Regulation on Non-Use of Crypto Assets in Payments published in the Official Gazette on 16.04.2021, crypto assets were defined for the first time. According to this definition, crypto assets are intangible assets created virtually using distributed ledger technology or similar technology and distributed over digital networks but not qualified as fiat money, fiat money, electronic money, payment instruments, securities, or other capital market instruments. Many researchers in Turkiye believe that this definition is limited to payments, which is the field of activity of the CBRT, which issued the regulation, and that there is still no general definition of crypto assets in Turkiye.
In addition to recognizing crypto assets, the regulation also included some prohibitions: Direct or indirect use of crypto assets in payments and provision of services for this purpose were prohibited. Payment service providers are also prohibited from developing business models in which crypto assets are directly or indirectly used in the provision of payment services and the issuance of electronic money, and from providing any services related to such business models.
Right after this regulation, crypto asset service providers were determined to be liable under the Law on Prevention of Laundering Proceeds of Crime. A guide for crypto asset service providers has been published by MASAK on the institution's website. Accordingly, crypto asset service providers must fulfill obligations such as customer recognition (KYC), suspicious transaction reporting, providing information and documents, providing continuous information, preservation, and submission. In 2022, MASAK decided to impose administrative fines on some crypto asset service providers due to liability violations during the inspections carried out within the scope of these legislative changes.
Despite all the developments, there is still no legal regulation in Turkish Law regarding who the crypto asset service provider is. There has been a significant development in this regard in the past weeks. The Financial Action Task Force (FATF) had put Turkiye on the gray list due to its shortcomings in preventing money laundering and financing terrorism.
Since the legislations mentioned above came into force, there has been an expectation of a regulation that would both complete the shortcomings of these legislations and enable Turkey to be removed from the gray list in the FATF. Answering questions during the 2024 budget negotiations, T.R. Minister of Finance Mehmet Şimşek stated that the legal regulation regarding crypto assets will be submitted to the Parliament as soon as possible, and thus Turkiye can be removed from the gray list.
With a regulation to be made in Turkiye, it is expected that a generally accepted definition and the legal nature of crypto assets will be determined in the first place. Determining the legal nature of crypto assets (for example, their qualification as securities or commodities) is a fundamental problem that affects even the taxation of crypto assets. Apart from this, regulations regarding the licensing of these platforms are expected with the definition of the concept of crypto asset service platforms. There may also be a minimum capital requirement for crypto asset service platforms.
FinTech regulations in Turkiye have gained momentum, especially after 2020, and recent regulations have been introduced in many different areas, from open banking to digital banking, from digital wallets to remote customer acquisition. The developments in the last three years have shown that the financial sector in Turkiye is ready for regulations and has been successful in complying with these regulations. The same situation is expected to happen specifically for crypto assets.
