Cryptocurrency Law

As the World changes and develops itself, we are meeting new concepts in economy. One of the biggest changes in economy is cryptocurrencies beyond any doubt. Cryptocurrencies might raise questions in minds in the first place, especially about their legal status. We are here to clear up your mind.

First things first, cryptocurrency is just a part of blockchain system. Blockchain system is a database where all the recorded transactions are locked and are located at the blocks that attached to each other. Therefore, we can easily say that blockchain system is a sufficient electronic system where we can make legal transactions.

In Turkish written legislations, cryptocurrencies’ legal status is not certain.  For instance Several Turkish Codes such as Turkish Code Obligations, Turkish Civil Code, Capital Market Law Code No: 6362 do not define what a cryptocurrency is or the cryptocurrency’s definition does not fit in the descriptions written in the Codes. Here is why:

  • According to Turkish Civil Code

In order for a cryptocurrency to be a ‘thing’, it should have a physical existence, yet cryptocurrencies are located in a database system. Which is why they are not considered as a ‘thing’ in a legal basis.

  • According to Turkish Code of Obligations

In this written legislation, a currency shall be introduced into the market by the competent authorities of the country. Cryptocurrencies are not dependent on a country or on an authority. That’s why cryptocurrencies are not considered as a ‘currency’ neither.

  • According to the Law No: 6493

This law takes electronic money on board. In order for a cryptocurrency to be an electronic money, it shall be exported by persons who are authorized by Central Bank of the Turkish Republic. Because cryptocurrencies are not exported by any authority, cryptocurrencies are not considered as they are electronic money. In addition to that, Banking Regulation and Supervision Agency (BRSA) made a statement that Bitcoins, therefore cryptocurrencies aswell, are not considered as electronic money.

In addition to all of these, in 2018, Capital Market Board came up with an explanation that Bitcoins, so do the cryptocurrencies are not considered as electronic money.

As we can understand, Turkish Law is not ready to accept cryptocurrencies as they are electronic money. Yet, this doesn’t mean that they can’t be used in legal transactions. In fact, they surely can be used in legal contracts. 

HOW CRYPTOCURRENCY CAN BE USED IN LEGAL CONTRACTS?

The main principle in Turkish Law is the liberty of contract. In Turkish Code of Obligations Provision 26 certainly says that the parties can freely determine the content of a contract within the limits stipulated by the law. The limits in Turkish Law can be listed as the following; personal rights, public order and immoral acts. Therefore, if a provision is not regulated as a mandatory rule and if the content of the contract does not cross with the conditions that listed above, then we surely candetermine cryptocurrency as a consideration of the contract.

CAN CRYPTOCURRENCY BE IMPLICATED IN EXECUTION PROCEEDINGS?

Cryptocurrencies are pecuniary and the confiscation of them is not forbidden theoretically and legally. That’s why there is no obstacle in front of the confiscation of the cryptocurrencies belonged to the debtors.

                                                                       CONCLUSION

What we explained so far indicates that there is no regulation for cryptocurrencies in Turkish legislation yet. Therefore, it is beneficial to receive support from a lawyer when making a legal transaction about cryptocurrencies.

 

 

 

 

 

Practice Areas