The first crypto asset regulation of Turkey, the Regulation on Non-Use of Crypto Assets in Payments (the “Regulation”) has been published in the Official Gazette dated April 16, 2021. So, does cryptocurrency trading have been banned with the Regulation as of April 31, 2021?

Under the Regulation, the crypto assets are neither regarded as prohibited goods, nor the purchase and sale, offering, transfer or custody of crypto assets and the platforms providing such services (i.e. crypto asset exchanges) are banned.

Then, what does this Regulation introduce?

As of April 30, 2021;

• direct or indirect use of crypto assets in payments,
• direct or indirect use of crypto assets in payment services and issuance of electronic money, and
• payment and electronic money institutions’ intermediating activities for fund transfers to or from the platforms providing purchase and sale, custody, transfer or offering of crypto assets will be banned.

It should be highlighted that, although, the Regulation expressly bans the fund transfers through “payment and electronic money institutions”, it is silent on the position of fund transfers to crypto asset exchanges through banks.  Although no clarification has yet been made by the authorities, it can be interpreted that, as of April 30, 2021, fund transfers to crypto asset exchanges through banks will still be possible.

Another significant topic introduced with the Regulation is the definition of the crypto assets for the first time in Turkey, even though in Article 3 of the Regulation it is specified that the crypto assets are defined only for implementation of this Regulation. Accordingly, within the scope of the Regulation, the crypto assets are defined as “intangible assets constituted virtually by distributed ledger technologies or similar technologies and transferred through digital networks, and which are not qualified as fiat money, representative money, electronic money, payment instrument, security or other capital markets instrument.

Should you request further information on what the new amendments bring, please contact our team.