The Capital Markets Board (SPK) has announced the establishment requirements for crypto asset service providers, setting a capital requirement of 50 million TL and giving a deadline of November 8, 2024, for applications.
In its latest bulletin dated August 8, 2024, the Capital Markets Board (SPK) announced the establishment requirements for crypto asset service providers. The entities listed in the Active Entities List are required to meet the specified conditions and submit their applications by the end of business on November 8, 2024.
The conditions are as follows:
A) Establishment Requirements for Platforms
1) For platforms to be granted permission by the Board for establishment:
a) They must be established as joint-stock companies.
b) All of their shares must be registered.
c) Their shares must be issued in return for cash.
d) Their minimum paid-in capital must be fully paid in cash and their equity capital must not be less than 50,000,000 TL.
e) Their articles of association must comply with the provisions of the Law and related regulations.
f) Their founders must meet the conditions specified in the Law and related regulations.
g) The phrase "crypto asset trading platform" must be included in their trade name to indicate the services they will provide.
h) The company's primary activity in its articles of association must be defined as the trading, initial sale or distribution, clearing, transfer, and/or custody of crypto assets.
i) The board of directors must consist of at least three members.
j) The partnership structure must be transparent and open.
2) The amounts specified in paragraph (ç) of clause (1) of this section may be increased under regulations that will be issued concerning operational principles.
B) Conditions for Founders, Partners, and Managers
1) The platform founders and partners must:
a) Not be bankrupt according to the provisions of the Bankruptcy Law or other regulations, must not have declared concordat, must not have had their restructuring plan approved through reconciliation, and must not have a postponement of bankruptcy ruling against them.
b) Not hold, directly or indirectly, 10% or more of the shares in or control any institution that was subjected to liquidation or whose operating license was revoked other than voluntary liquidation, including bankers, factoring, financial leasing, finance, savings finance, asset management, insurance, reinsurance, pension companies, and payment system operators, payment service providers, and institutions operating in the money and capital markets.
c) Not have been convicted, even if pardoned, of disgraceful crimes such as simple or aggravated embezzlement, embezzlement, bribery, theft, fraud, forgery, breach of trust, fraudulent bankruptcy, or crimes other than smuggling related to misuse and consumption, tampering with official tenders and procurements, tampering with the fulfillment of an obligation, preventing or disrupting an information system, destroying or altering data, misuse of bank or credit cards, laundering the proceeds of crime, financing of terrorism, and crimes listed in Article 5 of the Law on the Prevention of the Financing of the Proliferation of Weapons of Mass Destruction, or crimes against the state, sovereignty, and organs, and crimes against state security, the constitutional order, national defense, state secrets, and espionage, or tax evasion or involvement in such crimes.
d) Not be subject to a transaction ban under Article 101 of the Law.
e) Possess the necessary financial strength and the honesty and reputation required for the job.
f) Not be among the individuals responsible for the events leading to the revocation of the operating licenses of institutions whose licenses were revoked by the Board.
2) Real persons who have the right to receive more than half of the distributable profits of the platform or the right to elect or nominate more than half of the members of the board of directors under the articles of association must also meet the conditions listed in clause 1.
3) Legal entity founding partners of the platform representing 10% or more of the capital or voting rights, or possessing privileged shares entitling them to representation on the board of directors, even if representing less than this percentage, must meet the conditions listed in clause 1. In case of changes in the partnership structure after establishment, the same conditions apply to any new legal entity partners holding 10% or more of the capital or voting rights or possessing privileged shares entitling them to board representation.
4) In case real and legal person partners holding 10% or more of the capital or voting rights, or possessing privileged shares entitling them to board representation, lose the qualifications specified in clause 1, they must transfer their shares to persons meeting these conditions within six months. The Board will determine who will exercise the voting rights for the shares to be transferred and how they will be used during this period.
5) Managers, including board members, the general manager, deputy general managers, and other personnel authorized to represent the platform, must meet the conditions specified for partners except for the financial strength requirement. The majority of the board members must be graduates of four-year undergraduate programs.
C) Platform Establishment Procedures
1) Founders must submit to the Board the articles of association prepared in compliance with the establishment requirements, documents proving that they and the managers meet the conditions specified in section (B), and the forms and documents listed in Annex/1 and Annex/2. The Board may request additional information and documents if deemed necessary.
2) The granting of an establishment license to platforms under this article aims to ensure compliance with the Law’s establishment-related regulations. Companies granted an establishment license must also apply to the Board for an operational license within the scope of the operating principles and procedures to be determined by the Board.
Ç) Transitional and Compliance Provisions
1) Platforms conducting crypto asset service provider activities as of the effective date of the Law, which have existing customers and/or custody balances as of the date of application, are considered active under Article 11 of the Law. Platforms that declared their operation to the Board under the July 2, 2024, announcement but did not have any customers or custody balances as of the date of application will not be considered to meet the conditions specified in the Law, and their applications will not be processed.
2) Applications to the Board that do not include Form Annex/2 as specified in the July 2, 2024, announcement or that provide incomplete or insufficient information for items 3 and 4 of the document list in Annex/1 will be disregarded. If other documents are incomplete, the companies will be added to the "Active Entities List" prepared under the July 2, 2024, announcement if the missing documents are completed within 15 business days from the date of request. Applications will be disregarded if the required documents are not submitted in the specified form and timeframe.
3) Entities whose applications are not processed or disregarded under clauses (1) and (2) will be prohibited from engaging in activities defined under the platform concept in the Law following the Board’s notification. However, they may reapply by fulfilling the conditions specified in this Decision.
4) Companies listed or to be listed on the "Active Entities List" prepared under the July 2, 2024, announcement must apply to the Board by the end of business on November 8, 2024, by meeting the conditions specified in this Decision. These companies may continue their operations until the Board's regulations on operational principles come into effect under Article 11 of the Law.
5) Violations of the above regulations may result in the application of the unauthorized crypto asset service provider activity provisions under Articles 99/A and 109/A of the Law.