Since July 2, 2024, the day of the publication of the Cryptocurrency Law No. 7518 (the Law), there has been a dizzying activity in the Turkish cryptocurrency sector. Following the Law, the Capital Markets Board (CMB) published an announcement on July 2, 2024 and a regulatory Resolution on August 8, 2024.Following the applications made pursuant to the CMB announcement, the different categories of lists announced by the CMB and in the wake of the Resolution, there appears to be some confusion regarding the path to be followed by existing and new players who wish to participate in the sector as cryptoasset service providers.
In order to eliminate this confusion, the following illustrative explanations are set out below on how companies whose applications have been deemed successful by the CMB and have been included in the list of operating companies, those who have applied but have not yet been included in this list, and those who wish to take part in the Turkish Crypto Asset sector but have not yet applied, should proceed in the current situation.
As is known, within the first one-month period stipulated in the Law, a large number of companies applied to the CMB, the regulatory authority, to certify that they were providing cryptoasset services before the Law entered into force. As a result of the evaluations made by the CMB regarding these applications, three different lists were published. The first and most important one is the “List of Operating Companies”. The second list is the “List of Platforms whose Applications have been removed from Processing and the List of Platforms whose Applications have not been processed”, and the last list is the “List of Platforms Declaring Liquidation”. Below, the status of the companies on these lists and the status of the companies that have not yet submitted any applications will be evaluated within the framework of the Principle Decision issued by the CMB.
1- Status of Companies Listed on the List of Operating Companies
There are currently 76 companies on this list.The requirements for these companies are relatively straightforward. The biggest advantage of companies that make it to this list is that they can continue their activities throughout the license application process. However, as clearly emphasized in the CMB’s announcement, being on this list does not mean that the institutions are authorized in accordance with the relevant legislation. In the current situation, these institutions are required to apply to the CMB until the close of business on 08.11.2024 upon fulfilling the conditions stipulated in the CMB Principle Decision No. i-SPK.35.B (dated 08/08/2024 and numbered 42/1259).
2- Status of Companies Listed on the List of Platforms whose Applications have been removed from Processing and the List of Platforms whose Applications have not been processed
This list includes 32 companies that did not qualify to be included in the list of “operating companies” due to incomplete or insufficient disclosures and documents as requested by the CMB. In addition, 32 companies that did not have any customers and/or custody balances of customers as of the application date were also not eligible to be included in the list of operating companies. The bad news for these companies is that “if these companies are operating”, they should immediately cease their operations. The good news is that if these companies fulfill the conditions set out in the CMB’s Resolution, they will be eligible to resume operations in a short period of time.
3- Status of Companies that have not yet applied for a license
After the Law enters into force, companies wishing to provide cryptoasset services can apply upon fulfilling the conditions set out in the Principle Decision published by the CMB. In this respect, I believe that they are in the same position as the companies mentioned under the heading no. 2. Both these companies and the companies I mentioned under the heading no. 2 will be entitled to obtain an establishment permit by the CMB if they meet the conditions specified in the Resolution. The most important issue for them to start operations is whether the sub-regulations that set out the conditions for the Operating License to be issued by the CMB will be in force or not. It is apparent that the CMB will also determine the operating permit conditions for these organizations. It is at the discretion of the CMB for these companies to commence operations in the event that the sub-regulations determining the conditions for the operating permit are not in force at the time of obtaining the establishment permit.
4- Status of Companies Listed on the List of Platforms Declaring Liquidation
There are 8 companies on this list. The situation of these companies is relatively easier to understand. The most important point for these companies is that they should decide to liquidate within three months without harming the rights and interests of their customers and should not accept new customers during the period of liquidation.
Points to Take into Consideration in the Licensing Process
The most important element of a successful licensing process is the timely and complete provision of the information and documents requested by the regulator, the CMB, in the form and content as per the requirements. It should also be emphasized that the application file should be prepared in a systematic and manageable manner.
Another important issue is to submit the application accurately and accurately reflecting the real situation. As a matter of fact, one of the most important reasons for license revocations is obtaining a license with misrepresentations, inaccurate statements, information and documents.
ABOUT MENA CYRPTO
Menacrypto is a new generation consulting company founded by the joint venture of a team with more than 15 years of experience in cryptoassets, banking, payment services and electronic money and competent in financial technology. Menacrypto has managed to bring together all the experts (including information systems auditors, blockchain software developers, token economics experts, lawyers, tax experts, certified public accountants, intellectual property rights experts) needed by a cryptoasset service provider. The platform has the competence to respond to all kinds of the client’s needs, especially regulatory consultancy, licensing and operational requirements. Menacrypto experts have supported/are supporting more than 50 fintech companies to date, including crypto exchanges. Menacrypto operates in a wide geography and provides services in areas including Turkey, Germany, Uk, Netherlands, Saudi Arabia, UAE, Qatar, Estonia and Singapore. Menacrypto is your partner covering all your needs in cryptocurrency, blockchain and metaverse ecosystem with its outstanding expertise and experience.
Attorney Dr. Mehmet S. YURTÇİÇEK
Senior Advisor & Manager
Contact:
Email : mehmet.yurtcicek@bafinconsultancy.com
Telephone : +905337602006