Crypto Asset Regulation: A Detailed Look

Disclaimer: This article is for informational purposes only and does not constitute legal, financial, or investment advice.

Türkiye has entered a new phase in the regulation of crypto assets with the introduction of new definitions and authorizations under the Capital Markets Law.

The new framework covers a broad range of topics, including the licensing of crypto asset service providers, protection of customer assets, technical infrastructure obligations, cybersecurity requirements, and the potential tokenization of capital market instruments.

This article provides an overview of the key concepts introduced by the regulation and the main implications for the crypto asset ecosystem in Türkiye.

Definitions of Crypto Assets and Wallets

Under the new regulation, a “wallet” refers to software, hardware, systems, or applications that enable the transfer and custody of crypto assets.

In the crypto ecosystem, wallets are generally divided into two main categories:

Hot Wallets

Hot wallets are software-based wallets connected to the internet. They are typically accessed through mobile applications, browser extensions, or exchange platforms.

Although hot wallets offer ease of use and quick access, they carry higher security risks because private keys may be exposed to online threats.

Cold Wallets

Cold wallets are physical devices that operate offline. Since they store private keys in an offline environment, they are generally considered more secure against cyberattacks.

They are commonly preferred by institutional users and individuals holding significant amounts of crypto assets.

Definition of Crypto Assets

According to the law, a “crypto asset” refers to an intangible asset that can be:

created using blockchain or similar distributed ledger technologies,
stored electronically,
distributed over digital networks,
capable of representing value or rights.

This broad definition may cover not only cryptocurrencies, but also stablecoins, tokens, and other forms of digital assets that may emerge in the future.

Crypto Asset Service Providers — CASPs and VASPs

The concept of “Crypto Asset Service Providers” under the regulation is similar to the CASP concept used in the European Union’s MiCA regulation.

This category may include:

crypto asset trading platforms,
custody service providers,
transfer and exchange service providers.

In international regulatory terminology, FATF uses the term “VASP” — Virtual Asset Service Provider — for similar entities.

Similarities with MiCA

Türkiye’s new regulatory approach appears to share several similarities with the European Union’s MiCA framework.

MiCA primarily aims to:

provide legal clarity for crypto assets,
establish harmonized rules across the EU,
introduce specific rules for stablecoins,
regulate and license crypto asset service providers.

Similarly, the Turkish framework focuses on licensing, technical competence, protection of customer assets, and regulatory oversight.

Licensing Requirement for Crypto Asset Service Providers

Under the new regulation, crypto asset service providers operating in Türkiye will be required to obtain authorization from the Capital Markets Board of Türkiye.

Companies will need to:

submit the required documentation,
commit to complying with secondary regulations,
satisfy technical and financial adequacy requirements.

In addition, service providers are expected to pay:

1% of their revenue to the Capital Markets Board,
1% of their revenue to TÜBİTAK.

Protection of Customer Assets

One of the most significant aspects of the regulation concerns the protection of customer assets.

Accordingly:

customer assets must be segregated from company assets,
customer funds cannot be seized for the company’s debts,
customer assets cannot be included in bankruptcy proceedings,
customer funds cannot be used to satisfy the obligations of the service provider.

This approach aims to prevent risks similar to those observed in major global and local exchange failures.

Tokenization of Capital Market Instruments

The regulation also opens the door for capital market instruments to be issued as crypto assets.

This may include instruments such as:

shares,
bonds,
investment funds,
derivatives.

The Capital Markets Board may also require integration between electronic records and the Central Securities Depository of Türkiye.

This development may represent a significant step toward the tokenization of securities and the modernization of Türkiye’s digital finance infrastructure.

Technical Infrastructure and Cybersecurity Obligations

Crypto asset service providers will be required to:

securely manage their information systems,
implement cybersecurity measures,
establish internal control systems,
comply with technical infrastructure criteria determined by TÜBİTAK.

TÜBİTAK’s role in assessing technical infrastructure is expected to be particularly important in the implementation of the new framework.

Requirements for Shareholders

The regulation also introduces eligibility criteria for shareholders of crypto asset service providers.

Shareholders are expected to:

not be bankrupt,
not have declared concordat,
not have certain final criminal convictions,
possess sufficient financial strength,
maintain a transparent ownership structure.

These requirements aim to increase institutional standards and market integrity within the sector.

Unauthorized Activities and Access Restrictions

The Capital Markets Board may impose measures against unauthorized platforms, including:

access restrictions,
content removal,
restrictions on advertisements and public announcements.

Unauthorized investment advisory or portfolio management activities related to crypto assets may also fall within the scope of enforcement.

Legal Liability of Service Providers

Crypto asset service providers may be held directly liable for damages arising from:

cyberattacks,
information security breaches,
technical infrastructure failures,
loss of customer assets,
failure to meet cash payment or crypto asset delivery obligations.

This creates a strict liability-oriented framework focused on user protection and operational resilience.

Proof of Reserve and Transparency

Proof of Reserve is a mechanism used to verify whether a crypto exchange actually holds the assets it claims to hold on behalf of its users.

Through this process:

exchange reserves are reviewed,
customer asset balances are compared with actual reserves,
discrepancies or deficiencies can be identified and reported.

As regulatory expectations increase, transparency mechanisms such as Proof of Reserve may become more widely adopted across the sector.

Mechanisms That Improve User Protection

Multi-Signature Wallets

Multi-signature wallets require multiple approvals before a transaction can be executed.

This structure reduces the risk of unauthorized transactions by preventing a single individual from having unilateral control over assets.

Escrow Services

Escrow mechanisms help reduce counterparty risk by holding assets until agreed conditions are satisfied.

In crypto asset transactions, escrow structures may serve as an additional layer of protection between transaction parties.

Conclusion

The new regulatory framework aims to make Türkiye’s crypto asset ecosystem more institutional, transparent, secure, and accountable.

Licensing requirements, customer asset protection rules, technical infrastructure standards, and the potential tokenization of capital market instruments all point to a significant transformation in the sector.

In particular, the possibility of issuing capital market instruments as blockchain-based crypto assets may play an important role in the future development of Türkiye’s digital finance infrastructure.