Towards a New Era in Crypto Asset Markets in Turkey

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In recent years, crypto assets and blockchain technologies have become a focus of great interest worldwide, even beyond the financial world. Türkiye has not been left behind by these developments and has put the issue of regulating crypto asset service providers on its agenda. In fact, the first concrete step regarding the legal framework that has been expected to be introduced regarding crypto assets in the last three years was taken last week. In this context, the Bill on Amendments to the Capital Markets Law, which includes regulations regarding crypto assets, has been submitted to the Presidency of the Turkish Grand National Assembly.

These regulations, which are planned to be included in the much-amended Capital Markets Law rather than in a separate law, aim to ensure that the crypto asset ecosystem operates more securely, transparently and under supervision. At the same time, it is a priority for Turkey to be removed from the gray list by complying with the standards determined by the Financial Action Task Force (FATF). It should be noted that these regulations closely concern the legal status of not only known cryptocurrencies, but also stablecoins and NFTs (Non-Fungible Tokens).

Regulation of Crypto Asset Service Providers in Turkey

First of all, if the draft becomes law in this way, the focus will be on crypto asset service providers rather than crypto assets. However, the definition of concepts such as "wallet", "crypto asset", "crypto asset service provider", "crypto asset custody service", "platform" is an important development. When these definitions are examined, it can be seen that some points are welcomed in the ecosystem. For example, the positive approach to non-custodial wallets, which have different approaches to how they will be regulated and controlled all over the world, is a pleasing development. It is anticipated that discussions on how to draw the boundaries of these definitions will continue at least until the implementation is clarified and/or secondary regulations are introduced. In this context, it is noteworthy that, for example, the concept of platform is defined quite broadly. One of the other questions we encounter is whether banks can obtain a crypto asset trading service authorization certificate.

One of the most important points of the draft is undoubtedly making it mandatory for crypto asset service providers to obtain permission from the CMB in order to be established and start operating. Thus, it is aimed for users to make transactions safely under the supervision of the CMB. There is no regulation in the bill regarding the taxation of transactions for end users; However, it is now a known fact that it is on the agenda of the legislator.

What about NFTs?

NFTs, as unique digital assets, are unique, non-fungible tokens that represent ownership and originality of art, music, games and other digital content. Although the NFT craze of early 2021 is over, the true value of NFTs is understood and the features they have will be taken advantage of. Thus, we have entered a period in which new application areas will emerge. While regulation of crypto asset service providers is on the agenda, the legal status of NFTs and NFT platforms has also become an important topic of discussion. How should NFT marketplaces be positioned vis-à-vis crypto asset service providers? Are there obligations such as KYC/AML for these platforms?

How NFTs will be evaluated legally brings with it a few basic questions:

What innovations do NFTs bring in terms of property rights on digital assets? What rights does the purchaser of an NFT have over the associated digital content? How do the sale and trade of NFTs affect the intellectual property rights of authors? How will the income from buying and selling NFTs be taxed? Will this be similar or different to the taxation of crypto assets? What risks do NFTs pose in terms of protecting personal data and consumers? It is also important to evaluate the legal status of NFT Marketplaces, which are digital platforms where users can buy and sell NFTs.

24-25 May Istanbul NFT Conference

Just when crypto assets are on the agenda in Turkey, the conference organized for the promotion and discussion of the book "The Routledge Handbook of NFT Law", which will be published by Taylor & Francis publishing house at the end of 2024, will focus on NFTs in both their technical and legal dimensions. The conference, organized under the sponsorship of ARKSIGNER in cooperation with the University of Florida and Bilkent University, aims to provide an academic platform where the authors of the book will discuss the important points of their own chapters and where external participants can exchange ideas.

"The Routledge Handbook of NFT Law" aims to provide a comprehensive review of NFTs from a legal perspective. The book was created with the contributions of academics who are experts on the subject from different universities around the world and focuses on NFTs with both their technical and legal dimensions.

Conference participants will also have the opportunity to learn details about one of Turkey's important NFT initiatives!

You can find information about the event, which will take place on May 24-25, in the program below.
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