LEGAL NATURE OF CRYPTO ASSETS

1. INTRODUCTION

With the acceleration of digitalization, the ways in which economic values ​​are created, stored, and transferred have changed significantly. Crypto assets, based on blockchain and distributed ledger technologies, have quickly become a topic of discussion for individual investors, companies, and public authorities due to their structures that differ from the traditional financial system. The fact that crypto assets enable cross-border transfers, can be transacted without the need for a central authority, and carry economic value in a digital environment has raised the question of how these assets should be legally classified.

There is no single agreed-upon approach regarding the legal nature of crypto assets. Whether crypto assets can be considered money, electronic money, securities, commodities, intangible assets, or a property value in themselves depends on their characteristics and intended use. Crypto assets used for payment and value transfer, such as Bitcoin, cannot be evaluated under the same legal framework as tokens that provide the right to participate in a specific project, benefit from a service, or make an investment.

Determining the legal nature of crypto assets is not merely a matter of theoretical classification. This determination directly affects numerous legal processes related to crypto assets, including ownership, transfer, inheritance, seizure, taxation, and use as collateral. Furthermore, the liability of crypto asset platforms, investor protection, processing of personal data, prevention of fraudulent activities, and prevention of money laundering are also significant aspects of the issue.

In Türkiye, with Law No. 7518, which came into force on July 2, 2024, crypto asset service providers were included within the scope of Law No. 6362 on Capital Markets, and the Capital Markets Board was authorized to regulate and supervise these institutions. Subsequent secondary regulations have begun to regulate the establishment, operation, capital adequacy, custody services, and obligations to customers of crypto asset platforms in detail.

However, it is not possible to say that all issues regarding the nature of crypto assets in terms of private law, enforcement and bankruptcy law, inheritance law, and tax law have been definitively resolved. The continuous development of the technological features of crypto assets and the emergence of new types of digital assets with different functions necessitate the reinterpretation of existing legal rules and, when necessary, the creation of new regulations.

This study will examine the legal nature of crypto assets in light of current regulations in Turkish law, differing opinions in legal doctrine, and international approaches. Furthermore, the main problems arising from crypto assets in terms of ownership, seizure, inheritance, taxation, and legal liability will be evaluated, and solutions to existing regulations will be discussed.

2. THE CONCEPT OF CRYPTO ASSETS

I. WHAT IS A CRYPTO ASSET?

Crypto assets are a general term for intangible assets that are created, stored, and transferred digitally, and represent an economic value or a specific right. These assets are created using distributed ledger technology or similar technologies that allow transactions to be recorded across multiple computers instead of a single central location.

The concept of a crypto asset is not limited to digital assets publicly known as "cryptocurrencies," such as Bitcoin. Tokens that grant the right to use a specific service, digital values ​​that offer the opportunity to participate in a project, asset-backed tokens, and some digital investment tools can also be considered crypto assets depending on their characteristics. Therefore, the concept of "crypto asset" has a broader meaning than the term "cryptocurrency.".

In Turkish law, a crypto asset is defined as an intangible asset that can be created and stored electronically using distributed ledger technology or similar technology, distributed over digital networks, and representing value or rights. This definition was added to the Capital Markets Law No. 6362 by Law No. 7518. Crypto asset service providers have also been subject to the regulation and supervision of the Capital Markets Board since July 2, 2024.

Although crypto assets do not have a physical form, they possess economic value and can be bought, sold, stored, and transferred between individuals. These assets are mostly held through digital wallets and transferred using encryption information called private keys.

However, not all crypto assets serve the same function. Some are used for value transfer, while others may aim to provide access to a specific service, participate in governance, make investments, or represent a real asset in a digital environment. Therefore, when determining the legal nature of crypto assets, not only their technological structure but also their intended use and the rights they provide should be considered.

Crypto assets are a general term for intangible assets that are created, stored, and transferred digitally, and represent an economic value or a specific right. These assets are created using distributed ledger technology or similar technologies that allow transactions to be recorded across multiple computers instead of a single central location.

The concept of a crypto asset is not limited to digital assets publicly known as "cryptocurrencies," such as Bitcoin. Tokens that grant the right to use a specific service, digital values ​​that offer the opportunity to participate in a project, asset-backed tokens, and some digital investment tools can also be considered crypto assets depending on their characteristics. Therefore, the concept of "crypto asset" has a broader meaning than the term "cryptocurrency.".

In Turkish law, a crypto asset is defined as an intangible asset that can be created and stored electronically using distributed ledger technology or similar technology, distributed over digital networks, and representing value or rights. This definition was added to the Capital Markets Law No. 6362 by Law No. 7518. Crypto asset service providers have also been subject to the regulation and supervision of the Capital Markets Board since July 2, 2024.

Although crypto assets do not have a physical form, they possess economic value and can be bought, sold, stored, and transferred between individuals. These assets are mostly held through digital wallets and transferred using encryption information called private keys.

However, not all crypto assets serve the same function. Some are used for value transfer, while others may aim to provide access to a specific service, participate in governance, make investments, or represent a real asset in a digital environment. Therefore, when determining the legal nature of crypto assets, not only their technological structure but also their intended use and the rights they provide should be considered.

3. LEGAL NATURE OF CRYPTO ASSETS

The legal nature of crypto assets is determined by the functions and rights they provide. Not all crypto assets can be considered money, securities, or electronic money. Therefore, each crypto asset's technical structure, intended use, issuance method, and the rights it grants to its owner must be evaluated individually.

In Turkish law, crypto assets are defined as intangible assets that can be created and stored electronically using distributed ledger technology or similar technology, distributed over digital networks, and representing value or rights. This definition shows that crypto assets, despite not having a physical presence, can have economic value and represent certain rights. With Law No. 7518, crypto asset service providers have been brought under the regulation and supervision of the Capital Markets Board.

Regarding the legal nature of crypto assets, the first issue to consider is whether they can be classified as money. In Türkiye, crypto assets are not a legally mandated means of payment like the Turkish lira. Furthermore, according to the Regulation on the Prohibition of the Use of Crypto Assets in Payments, the direct or indirect use of crypto assets in payments is prohibited. The regulation states that crypto assets are not classified as fiat money, book money, electronic money, means of payment, securities, or other capital market instruments.

However, the fact that a crypto asset is created solely in a digital environment does not mean that it cannot qualify as a capital market instrument. Digital assets that provide their holders with ownership rights, income, dividends, or specific investment rights may be evaluated under capital market legislation according to their characteristics. Therefore, in the legal classification of crypto assets, the economic function and the rights granted to the holder should be considered instead of the asset's name.

Some crypto assets are used solely for value transfer or investment purposes. Others serve the function of providing access to a specific product or service, participating in the governance of a platform, or representing a real-world asset in a digital environment. Therefore, it is incorrect to subject Bitcoin, utility tokens, security tokens, and asset-backed tokens to the same legal status.

From a private law perspective, crypto assets can be considered intangible assets with economic value. The fact that crypto assets can be transferred between individuals, bought and sold, and stored in digital wallets demonstrates their asset value. However, unlike physical goods, control over crypto assets is primarily achieved through private keys and digital wallet information.

The fact that crypto assets have intangible property value gives rise to legal consequences in areas such as inheritance, seizure, property division, collateral, and bankruptcy. While it is possible to include these assets in the estate upon the death of the crypto asset owner, the inability to access the private key or platform account can cause serious problems in practice. Similarly, in terms of seizing crypto assets, the platform on which the asset is held, whether the debtor controls the private key, and whether the asset can be traced are important factors.

Regarding crypto asset platforms, secondary regulations that came into effect on March 13, 2025, introduced detailed rules concerning establishment, operation, custody, transfer, listing, internal control, risk management, independent auditing, and capital adequacy. Thus, the legal status of platforms and custodians providing services related to these assets has become more clearly defined, rather than the crypto assets themselves.

In conclusion, the legal nature of crypto assets cannot be determined through a single concept applicable to all digital assets. In Turkish law, crypto assets are generally considered intangible assets that represent value or rights; however, each asset's function, such as payment, investment, access to services, or asset representation, gives rise to different legal consequences. Therefore, when determining the legal nature of crypto assets, the economic purpose of the asset and the rights it provides to its owner should be prioritized over its technological structure.

4. REGULATIONS REGARDING CRYPTO ASSETS IN TURKISH LAW

Regulations concerning crypto assets in Turkish law initially emerged with restrictions on their use as a means of payment, and later evolved into a comprehensive structure with the placement of crypto asset service providers under the supervision of the Capital Markets Board. While the buying and selling of crypto assets is not entirely prohibited today, significant rules have been established regarding platform operations, asset protection, custody services, transfer transactions, and market security.

One of the first fundamental regulations regarding crypto assets in Türkiye is the Regulation on the Prohibition of the Use of Crypto Assets in Payments, issued by the Central Bank of the Republic of Turkey. This regulation, which came into effect on April 30, 2021, prohibits the direct or indirect use of crypto assets in payments and the provision of services related to them. Payment service providers are also not permitted to develop business models based on the use of crypto assets. This regulation restricts the payment of goods and services with crypto assets, not the buying or selling of crypto assets themselves.

The most significant change regarding crypto assets in Turkish law was implemented with Law No. 7518 Amending the Capital Markets Law. This law, which entered into force on July 2, 2024, legally defined the concepts of crypto assets and crypto asset service providers; platforms and organizations offering crypto asset custody services were placed under the regulatory and supervisory authority of the Capital Markets Board (SPK). It became mandatory for crypto asset service providers to obtain permission from the SPK in order to be established and commence operations.

Under the law, platforms are required to track customer cash and crypto assets separately from their own assets. Customer assets cannot be seized, pledged, or included in the bankruptcy estate in the event of the platform's bankruptcy due to the platform's debts. This regulation aims to protect customer assets in the event of the platform experiencing financial difficulties. However, the protection of crypto assets held in customers' digital wallets and the security of private keys remain primarily the responsibility of the users.

Following Law No. 7518, two important communiqués regarding crypto asset service providers came into effect on March 13, 2025. Communiqué No. III-35/B.1 regulates the establishment, operation, ownership structure, managers, personnel, internal control, risk management, information systems, independent audit, and reserve proof audit of service providers. Communiqué No. III-35/B.2 establishes the principles regarding the buying, selling, transfer, storage, listing on platforms, execution of customer orders, and capital adequacy of service providers for crypto assets.

Secondary regulations mandate the separation of customer assets from platform assets, the separate monitoring of customer accounts, and the regular auditing of crypto asset reserves. Platforms are also required to establish price surveillance systems, detect market-disrupting transactions, and apply specific evaluation criteria for listing crypto assets. Leveraged trading, margin trading, and certain derivative transactions based on crypto assets are also prohibited.

Cryptocurrency service providers are also among the entities obligated under legislation related to preventing money laundering and terrorist financing. These entities are required to know their customers, verify their identities, report suspicious transactions to the Financial Crimes Investigation Board (MASAK), maintain transaction records, and establish necessary compliance measures. MASAK updates its guidelines regarding the obligations of cryptocurrency service providers in line with technological and legal developments.

Operating in the cryptocurrency sector without authorization can result not only in administrative sanctions but also in criminal liability. Individuals and authorized representatives of legal entities engaging in cryptocurrency service provision without permission from the Capital Markets Board (SPK) face imprisonment and fines. Furthermore, embezzlement of customer funds or cryptocurrencies by platform managers or employees is specifically punishable as a crime.

However, current regulations primarily focus on the activities of crypto asset service providers and the regulation of the market. There is no single regulation that specifically addresses every issue concerning the ownership of crypto assets, their inheritance, seizure, inclusion in property division during divorce, use as collateral, and taxation. In these matters, the Turkish Civil Code, the Turkish Code of Obligations, the Enforcement and Bankruptcy Law, tax legislation, and other general legal principles must be considered together, according to the specific characteristics of each case.

In conclusion, regulations concerning crypto assets in Turkish law are based on licensing service providers, market supervision, and the protection of investor assets, rather than a complete ban on crypto assets. Capital Markets Board (SPK) regulations have subjected platform activities to more detailed rules; Central Bank of Turkey (TCMB) regulations have restricted the use of crypto assets as a means of payment; and Financial Crimes Investigation Board (MASAK) regulations have imposed obligations aimed at preventing financial crimes. However, it is expected that the problems arising from crypto assets in terms of private law and tax law will become clearer in the future with new legal regulations and judicial decisions.

5. USE OF CRYPTO ASSETS IN LEGAL TRANSACTIONS

The use of crypto assets in legal transactions is becoming increasingly common due to their economic value, transferability between individuals, and digital storage. Crypto assets can be subject to various legal transactions such as buying, selling, exchanging, storing, investing, donating, and inheriting. However, the validity and consequences of any transaction should be evaluated based on the nature of the crypto asset and the purpose of the transaction.

In Turkish law, crypto assets are defined as intangible assets that represent value or rights. Therefore, crypto assets can be the subject of contracts and transferred between parties. Crypto asset trading is mostly carried out through platforms regulated and supervised by the Capital Markets Board. The buying, selling, storage, and transfer transactions conducted on these platforms are governed by the Capital Markets Law No. 6362 and related secondary regulations.

The act of buying and selling crypto assets is different from paying for goods or services with crypto assets. According to regulations issued by the Central Bank of the Republic of Turkey, the direct or indirect use of crypto assets for payments is prohibited. Therefore, it is not possible to pay for a product or service with Bitcoin or any other crypto asset. However, buying, selling, or exchanging crypto assets for investment purposes is not entirely prohibited.

Crypto assets can also be subject to donation and inheritance transactions. A person transferring a crypto asset to another without consideration can be considered a donation. In the event of the death of the crypto asset owner, these assets, which have economic value, can be included in the estate. However, the inability of heirs to access the digital wallet address, platform account, or private key can make it difficult to identify and transfer the crypto assets to the heirs.

While it is theoretically possible to use crypto assets as collateral, Turkish law lacks detailed and specific regulations on this matter. Specifically, the contract should clearly define who holds the private key, how the collateral right is established, what happens if the asset loses value, and how the crypto asset will be converted into cash in case of non-payment of the debt. Otherwise, serious disputes may arise between the parties.

Regarding the seizure of crypto assets, it is important that the asset is identifiable and in the possession of the debtor. If the crypto asset is held on a platform operating in Türkiye, identifying the account and asset information may be easier. However, for assets held in personal wallets, the inability to access the private key can make seizure procedures more difficult. Furthermore, it is legally guaranteed that customer-owned crypto assets cannot be seized, pledged, or included in the platform's bankruptcy estate due to the platform's own debts. This protection differs from legal action that could be taken due to the customer's own debts.

When using crypto assets in legal transactions, it is important to clearly specify the identities of the parties, wallet addresses, transfer date, amount, transaction fee, and control of the private key. Furthermore, recording the transaction, storing transfer documents, and verifying the platform's status with the Capital Markets Board (SPK) will help prevent potential disputes. The SPK publicly publishes lists of crypto asset service providers that are currently operating or whose application process is ongoing.

In conclusion, while the use of crypto assets in legal transactions is possible, payment restrictions, platform regulations, custody conditions, and proof issues must be considered. When a crypto asset is transferred, donated, inherited, seized, or used as collateral, both the technical characteristics of the transaction and its legal consequences must be evaluated together.

6. LEGAL LIABILITY IN CRYPTO ASSETS

Legal liability in crypto assets is determined by the behavior of platforms, custodians, administrators, and users during the transaction process. Decline in the value of crypto assets, unauthorized transfers, inaccessibility to digital wallets, or failure of platforms to fulfill their obligations can all lead to different legal consequences.

In Turkish law, crypto asset service providers are liable for damages arising from their unlawful activities and their failure to fulfill their obligations to customers regarding cash payments or crypto asset delivery. Any clauses in contracts between platforms and customers that waive or limit the service provider's liability are considered invalid. Platforms are also required to establish effective mechanisms for reviewing customer objections and complaints.

Legal liability in crypto assets also includes cyberattacks and information security breaches. Platforms may be held responsible for crypto asset losses resulting from the operation of information systems, the conduct of personnel, security vulnerabilities, and cyberattacks. If the service provider cannot compensate for the damage, or if it is clearly impossible to do so, managers and employees may be held personally liable in proportion to their fault. However, short-term system outages or temporary inability to conduct transactions that occur without fault on the part of the platform do not necessarily give rise to liability for compensation.

To protect customer assets, customer cash and crypto assets must be kept separate from the service provider's own assets. Customer assets cannot be seized, pledged, or included in the platform's bankruptcy estate due to the platform's debts. Conversely, seizure or precautionary measures may be applied to a customer's crypto assets due to their own debts.

The responsibility for storing crypto assets may vary depending on where the assets are held. If the assets are held with an authorized platform or custodian, the service provider is responsible for taking the necessary security measures. If the user stores their crypto assets in their own digital wallet, the protection of the private key, password, and access information is primarily the user's responsibility. For the platform to be held liable for damages resulting from the loss or sharing of the private key with third parties, the service provider's fault must be demonstrated separately.

Normal declines in the market value of crypto assets are, as a rule, considered within the scope of market risk undertaken by the investor. A platform being authorized by the Capital Markets Board (SPK) does not mean that the value of crypto assets or transactions are guaranteed by the state. Crypto assets are also not covered by the investor compensation system. However, the platform may incur legal liability if there is misleading information, market-disrupting transactions, unlawful execution of orders, or unauthorized use of customer assets.

The establishment, operation, internal control, risk management, information systems, custody, and capital adequacy obligations of crypto asset service providers are regulated in detail by the Capital Markets Board (SPK) communiqués that came into effect on March 13, 2025. Failure to comply with these obligations may result in private law liability, administrative sanctions, and, depending on the nature of the offense, criminal liability.

In conclusion, when determining legal liability for crypto assets, the cause of the damage, the platform's obligations, the user's security measures, the fault of the parties, and the causal link between the damage and the conduct must be considered together. While not every loss of value or technical problem gives rise to liability for the service provider, compensation may be claimed for damages resulting from breaches of security obligations, failure to protect customer assets, and unlawful transactions.

7. CONCLUSION

The legal nature of crypto assets cannot be explained through a single legal concept due to their technical characteristics, intended uses, and the economic value they represent. While some crypto assets are used as a medium of value transfer, others function as an investment, for participation in governance, for utilizing a specific service, or for representing a real-world asset. Therefore, when determining the legal nature of crypto assets, the economic function of the asset, its purpose of issuance, and the rights it grants to its owner should be considered more than the name used.

In Turkish law, crypto assets are defined as intangible assets that represent value or rights. However, this definition does not mean that all crypto assets are considered money, electronic money, securities, or capital market instruments. The characteristics of each crypto asset must be examined individually; a distinction must be made between assets that qualify as capital market instruments and those used solely for the transfer of digital value.

The enactment of Law No. 7518, which brought cryptocurrency service providers under the regulation and supervision of the Capital Markets Board (SPK), was a significant step in establishing the legal infrastructure for the cryptocurrency market in Türkiye. The establishment of platforms, operating licenses, safekeeping of customer assets, transfer transactions, and the responsibility of managers are now governed by specific rules. The SPK's up-to-date listing of operating cryptocurrency service providers demonstrates that the market is structured on a licensing and supervision basis.

However, crypto assets cannot be used as a means of payment in Türkiye. The Regulation on the Prohibition of Using Crypto Assets in Payments prohibits the direct or indirect use of crypto assets in payments for goods and services. However, this prohibition does not mean that the buying and selling of crypto assets for investment purposes through authorized platforms is completely prohibited.

The use of crypto assets in legal transactions can have consequences in various areas such as contracts, buying and selling, donations, inheritance, seizure, collateral, and property division. In particular, the storage of crypto assets in digital wallets and their control via private keys presents different proof and access issues compared to traditional property assets. Determining who owns the crypto asset, on which platform it is stored, and who made the transfer is crucial in resolving disputes.

In terms of legal liability for crypto assets, the source of the damage must be carefully considered. Legal liability may arise if the platform violates its security obligations, fails to protect customer assets, carries out unauthorized transfers, or provides misleading information. Conversely, ordinary fluctuations in market value and an investor losing access information to their digital wallet do not always create liability for the platform. When determining liability, the fault of the parties, their obligations, security measures, and the causal link between the damage and the behavior should be examined together.

Current regulations primarily focus on the activities of crypto asset service providers and the protection of investor assets. However, there is still a need for detailed and specific regulations regarding issues such as the inheritance of crypto assets, direct seizure, use as collateral, inclusion in property division in divorce cases, and taxation. In these areas, the Turkish Civil Code, the Turkish Code of Obligations, the Enforcement and Bankruptcy Law, and other general provisions are applied according to the specifics of the case.

In conclusion, the legal nature of crypto assets cannot be determined by a rigid classification encompassing all digital assets. Both the technical structures of crypto assets and their economic functions, as well as the rights they provide to users, must be considered. The aim of legal regulations should not be to hinder technological advancements, but rather to ensure market security, protect investor rights, clarify legal responsibility, and prevent abuse.

As the crypto asset market continues to evolve, it is crucial that Turkish law incorporates more transparent, predictable, and technologically adaptable regulations. Accurately defining the legal nature of crypto assets will contribute to both the protection of users and investors and the creation of a secure and sustainable digital asset ecosystem.