Following the introduction of the law on the regulation of crypto assets and crypto asset service providers in the Capital Markets Law numbered 6362 (“CML”) and the first regulation of the Capital Markets Board (“CMB”) dated 8 August 2024 on the establishment, shareholders, managers and share capital of platforms, another principle decision numbered 1484 published in the CMB’s bulletin dated 19 September 2024 (“Resolution”) introduced certain rules and principles in order to protect investors and prevent risks that may arise in the sector during the transition period.

Accordingly, several aspects such as restrictions on customer accounts, receipt of orders and platforms’ advertising and promotional campaigns, exclusion of qualified intellectual property (“NFT”) (non-fungible tokens) and assets used in virtual games from the scope of the CML and not considering liquidity provider activities as platform activities have been clarified and certain rules that sector players should take into account during the transition process have been ascertained.

The main rules and principles introduced by the Resolution are summarized below.

1. Restrictions are imposed on customer accounts and cash transfers.

• It has been reminded that cash transfers of the customers of the platforms must be carried out through banks or institutions authorized in this regard pursuant to the relevant legislation, and it has been prohibited for the platforms to receive, deliver and store customer cash in hand. Accordingly, the cash flow is intended to be traceable and a similar obligation has been introduced in parallel with the payment services legislation.
• It has been emphasized that the accounts to be opened in the name of customers will be clearly identified as belonging to the relevant platform customers and cannot be used for any other purpose.

2. Procedures for taking customer orders have been determined and taking orders through social media channels is prohibited.

• It is prohibited to receive customer orders outside of the specified procedures or through different social media channels such as Whatsapp, Telegram, etc.
• It is regulated that all orders of customers must be received through (i) the platforms’ own websites as declared to the CMB, (ii) their mobile applications or (iii) the platform’s authorized personnel through their registered phones.
• The requirements that platforms must comply with as of 8 November 2024 have been set out in order to keep secure and accurate records of orders received through these means.

3. NFT and assets used only in virtual games are excluded from the scope of the CML.

It is stated that these assets are outside the listing principles and that the provisions of the CML are not applicable to transactions related to these assets. In addition, in case of trading these assets, platforms listed in the “List of Operating Platforms” are required to notify the CMB, to trade these assets in a separate market, to add a warning text stating that these assets are not subject to the supervision and audit of the CMB, and to confirm that the warning has been read and understood by the investors before taking the order.

4. The activities of the entities whose main activity is providing prices to the platforms and trading on the given prices in order to provide liquidity and which do not provide any other service within the scope of the definition of platform under the CML are not considered as “platform activities”.

5. In peer-to-peer (“P2P”) digital marketplaces that allow transactions to be made directly between users, carrying out transactions on their own behalf but on the account of another person as a regular occupation, commercial or professional activity is considered to be unauthorized crypto asset service provider activity and these activities are required to be terminated as of 8 November 2024.

6. It was reminded that the issuance of capital market instruments as crypto assets is not currently allowed.

It was reminded that the activities falling under the authority and regulation of other institutions and organizations, such as commodities and real estate, must be carried out in accordance with the regulations of these institutions and organizations, regardless of whether the instrument used is a crypto asset, and that the crypto assets that do not comply with this requirement cannot be listed on the platforms. In this context, it was emphasized that capital market instruments cannot be issued and listed as crypto assets until the regulations are issued by the CMB, considering that the infrastructure and mechanisms have not yet become functional.

7. It is regulated that platforms cannot conduct crypto-asset lending transactions, transactions that would result in the granting of loans to customers and leveraged transactions.

8. It is prohibited for platforms to conduct misleading advertisements and promotional campaigns that manipulate investors.

It is regulated that platforms must be objective in all kinds of publications, postings, advertisements and announcements, that they cannot make misleading advertisements, and that they are not allowed to make commitments for absolute profit and/or guarantee against loss.

In addition, platforms are prohibited from conducting promotional campaigns that (i) contain a promise of return or lead to investment in one or more crypto assets, (ii) provide any benefit or advantage to the persons who bring customers to the platform or to the customers they bring to the platform, which must be terminated within 15 days following the Resolution.

In conclusion, we note that the CMB has taken measures to protect investors during the transition period against different and inappropriate examples detected in practice. In addition, we believe that steps have been taken to determine the place of some assets under the scope of the CML and that the procedures and principles regarding the issuance of capital market instruments as crypto assets will be clarified with additional secondary regulations in the upcoming period.