New Developments in Turkey’s Cryptocurrency Regulations: Implications for Bitcoin (BTC) and Ethereum (ETH)

• A new legislative proposal expected to be presented to the Parliament this week could potentially ban leveraged transactions in cryptocurrencies.
• The proposed law, which is ready to be presented to the Parliament after its final touches, will ban short selling and leveraged transactions related to crypto assets.
• Crypto assets will be defined as “intangible assets” for the first time, making transactions more transparent and reliable.

This article discusses the upcoming legislative proposal that could potentially ban leveraged transactions in cryptocurrencies, providing an in-depth analysis of its implications for the crypto market.

Regulating Crypto Assets

The proposed law, which is ready to be presented to the Parliament after its final touches, will ban short selling and leveraged transactions related to crypto assets. The law aims to align the broad definition of crypto assets with the definitions provided by international organizations. The Capital Markets Board (SPK) will be given the authority to determine the issuance principles. Licensing and auditing processes of trading platforms will also be managed by the SPK. Similar minimum operating conditions will be introduced for service providers as for financial institutions.

Implications for Crypto Trading

All transfer transactions made on platforms will be recorded and compliance with regulations set by the Financial Crimes Investigation Board (MASAK) will be ensured. Due to the sudden and large fluctuations in the prices of crypto assets, credit transactions, short sales, and leveraged transactions that increase risk will be banned. It is noted that similar bans and restrictions are also introduced in foreign applications. Secondary regulations will be made on investment consultancy and portfolio management, and SPK will be authorized in this regard.

Insurance Mechanism and Penalties

Due to the risky nature of crypto asset investments, no insurance mechanism will be established for buying and selling transactions. These transactions will be exempt from investor compensation. The draft law defines the crime of “unauthorized crypto asset service provision” and proposes penalties for those who operate without permission from the SPK.

Conclusion

The proposed legislation aims to regulate the crypto market and protect investors from potential risks. While it introduces stricter controls and penalties, it also provides a legal definition for crypto assets, increasing transparency and reliability in transactions. The impact of these changes on the crypto market will be closely watched by investors and stakeholders.