Cryptocurrencies granted legal status in Turkey under new crypto law

Turkey legalizes cryptocurrencies, defining them as “intangible fixed assets.”
SPK permission required for crypto organizations, with strict regulatory oversight.
Severe penalties for unauthorized activities, enhancing market security and compliance.

In a landmark move, Turkey has granted legal status to cryptocurrencies, redefining them as “intangible fixed assets” through a new regulation.

The new law, which has been published in the Official Gazette after approval by the parliament, not only legitimizes digital currencies but also introduces stringent oversight and penalties for unauthorized activities.

By mandating permissions from the Capital Markets Board (SPK) and implementing comprehensive regulatory standards, Turkey aims to increase transparency, security, and investor confidence in its cryptocurrency market.

Turkey’s new legal framework for cryptocurrencies

The new cryptocurrency law in Turkey marks a significant shift in how digital assets are perceived and managed in the country.

By classifying cryptocurrencies as “intangible fixed assets” within the Capital Markets Law, the country has laid the foundation for a more structured and enforceable approach to regulating these financial instruments. This classification offers a clear legal definition, thereby reducing ambiguities and enhancing the legitimacy of cryptocurrencies in Turkey’s financial ecosystem.

One of the most notable features of this regulation is the requirement for organizations operating in the cryptocurrency sector to obtain permission from the SPK. These entities are given a one-month window to apply for the necessary licenses, after which they will be under the regulatory supervision of the SPK.

This move is designed to mitigate the risks traditionally associated with the cryptocurrency market, promoting a safer and more reliable environment for investors.

The new law enhances market security and compliance

The new law introduces severe penalties for unauthorized cryptocurrency activities. Individuals involved in unlicensed transactions could face judicial fines calculated between 5,000 and 10,000 days and imprisonment ranging from three to five years.

This strict enforcement strategy aims to deter illegal activities and ensure compliance with the regulatory framework, thus fostering a more secure market.

Additionally, the regulation mandates meticulous record-keeping of all transactions conducted on cryptocurrency exchanges. This requirement is expected to create a clear audit trail, which will help in preventing fraud and other illicit activities.

By enhancing transparency, these measures aim to build investor trust and confidence in the cryptocurrency sector.

Structured listing procedures and standards

To further streamline the cryptocurrency market, the regulation requires platforms dealing with digital assets to develop written listing procedures.

These procedures will govern the selection, initial sale or distribution, and termination of trading of assets. The SPK will regulate the principles and standards applied to these procedures, ensuring a consistent and reliable framework for cryptocurrency trading platforms.

The introduction of these comprehensive measures signifies Turkey’s commitment to integrating cryptocurrencies into its broader financial regulatory environment.

By defining clear rules and establishing strict enforcement mechanisms, Turkey aims to create a more transparent, secure, and investor-friendly cryptocurrency market.