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Up to 22 years in prison for unauthorized crypto providers in Türkiye

Up to 22 years in prison for unauthorized crypto providers in Türkiye Representation of bitcoin cryptocurrency is seen in this illustration taken January 11, 2024. (Reuters)
By Newsroom
Jun 27, 2024 7:42 AM

The Turkish Parliament (TBMM) has passed a bill introducing new regulations on crypto assets. Individuals and legal entities operating as crypto asset service providers without authorization will face imprisonment for 3 to 5 years.

The “Bill on Amendments to the Capital Markets Law” has been approved by the TBMM General Assembly. According to the bill, crypto asset service providers must obtain permission from the Capital Markets Board (SPK) before establishment and operation. Compliance with the criteria set by TUBITAK is required for SPK authorization.

SPK is the authority

The SPK will be able to regulate transactions related to crypto assets that provide specific rights related to capital market instruments. The SPK can take regulatory actions, make decisions of both specific and general nature, and apply measures and sanctions. It will also determine the terms, scope, changes, fees, expenses, termination, and minimum requirements of contracts between crypto asset service providers and their clients.

Platforms must create a written listing procedure for determining which crypto assets will be traded or initially offered and distributed, subject to SPK’s principles and regulations.

Severe Penalties

Unauthorized individuals and legal entities operating as crypto asset service providers will face imprisonment from 3 to 5 years and judicial fines ranging from 5,000 to 10,000 days. Service providers misappropriating money or assets entrusted to them, including crypto assets, will face imprisonment from eight to 14 years and fines of up to 5,000 days and must compensate for damages.

If the crime involves deceitful actions to conceal embezzlement, the perpetrator will face imprisonment from 14 to 20 years and fines of up to 20,000 days. The judicial fine cannot be less than three times the damage caused to the service provider and its clients.

Individuals found to have illegally used the resources of a revoked crypto asset service provider for personal or third-party gain will face imprisonment from 12 to 22 years and fines up to 20,000 days.

Free market pricing

Prices on platforms will be freely determined. Platforms must ensure that transactions are reliable, transparent, efficient, stable, fair, honest, and competitive. They must establish systems for monitoring and take all preventive measures to detect, prevent, and avoid market-disruptive actions.

Platforms must identify and report market-disruptive actions and transactions, take necessary measures, including restricting, halting, or closing accounts involved in such actions, and report findings to the SPK.

BDDK’s opinion required for banks

Records of customer crypto asset transfers and fund transfers must be kept securely, accessibly, and traceably by crypto asset service providers. Customers’ crypto assets should be held in their wallets.

The SPK will set regulations for investment advisory and portfolio management related to crypto assets. Authorization certificates will be issued to crypto asset service providers for their activities, and banks will require approval from the Banking Regulation and Supervision Agency (BDDK).

Severe Penalties

Unauthorized individuals and legal entities operating as crypto asset service providers will face imprisonment from 3 to 5 years and judicial fines ranging from 5,000 to 10,000 days. Service providers misappropriating money or assets entrusted to them, including crypto assets, will face imprisonment from eight to 14 years and fines of up to 5,000 days and must compensate for damages.

If the crime involves deceitful actions to conceal embezzlement, the perpetrator will face imprisonment from 14 to 20 years and fines of up to 20,000 days. The judicial fine cannot be less than three times the damage caused to the service provider and its clients.

Individuals found to have illegally used the resources of a revoked crypto asset service provider for personal or third-party gain will face imprisonment from 12 to 22 years and fines up to 20,000 days.

Last Updated:  Jun 27, 2024 1:04 PM