THE SCOPE OF EU’S CRYPTO ASSETS REGULATION “MICA”

The Markets in Cyrpto Assets Regulation ("MiCA"), which was adopted in the European Union last year and includes rules on crypto assets, crypto asset issuers and crypto asset service providers, will gradually come into force in 2024. The provisions of MiCA relating to stable coins will enter into force on 30 June 2024, and the remaining provisions will enter into force on 30 December 2024. The provisions of MiCA that will enter into force in the first phase relate to asset-based tokens and e-money tokens. In MiCA, (i) asset-referenced tokens are defined as a type of cryptoasset, other than an electronic money token, that aims to maintain a stable value by reference to another value or right, or a combination thereof, including one or more official currencies, and (ii) electronic money tokens are defined as a type of cryptoasset that aims to maintain a stable value by reference to the value of an official currency. Apart from the regulation of these two types of tokens, MiCA will be implemented in the second phase with respect to service tokens. However, many NFTs are excluded from the scope of the regulation. (Güngör Law Firm)

INVESTIGATION INTO WORLDCOIN IN SOUTH KOREA

In South Korea, an investigation was launched into Worldcoin, the crypto asset service provider's wallet project that can identify users by scanning their irises. Worldcoin, which relies on biometric verification in identification and application login processes and ultimately creates a digital identity, creates a unique identity for each user by scanning the iris information in the eyes of its users. According to a statement issued by the Personal Data Protection Commission ("PIPC"), the data protection authority in South Korea, about WorldCoin, which is known to have more than two million users in total, WorldCoin currently recognises faces and irises in more than 10 locations in South Korea, the data they collected is classified as biometric data, which is one of the special categories of personal data, and that a detailed investigation will be carried out if any illegality is found in the collection and processing of this sensitive information and the transfer of personal data abroad. The data protection authorities of France, Germany and the United Kingdom had previously announced that they had opened an investigation into the legality of Worldcoin's biometric data processing practices. (IAPP)

CDBC ANTI-SURVEILLANCE ACT IN THE USA

In the US, the CBDC Anti-Surveillance Act, first introduced in 2022, was reintroduced in the Senate with the support of 5 Senators. One of the senators supporting the bill stated that "ensuring financial privacy is very important" and stressed that the central bank's digital currency "will allow the federal government to monitor and control the spending habits of all Americans". The proposal, which has been reintroduced in opposition to the Biden administration's approach to CDBC, includes provisions to prevent the Federal Treasury from issuing CBDCs directly or through a partnership, and to prevent people from tracking their financial habits through such tools. (Kitco)

TAX INVESTIGATION INTO CRYPTO ASSETS IN INDONESIA

In Indonesia, the Commercial Futures Supervisory Authority (CFTSA) has requested the Ministry of Finance to investigate transactions related to the taxation of crypto assets. It is estimated that approximately $2.5 million in revenue is generated from activities related to crypto assets in the country, while approximately $2 million is generated from other fintech businesses. Based on this difference, the CFTSA believes that crypto assets are also a serious financial sector; therefore, it calls on the country's Ministry of Finance to regulate and review the existing taxes regarding the taxation of crypto assets. (Finance Yahoo)

INVESTIGATION ON BINANCE FROM NIGERIA

Two senior executives of Binance have been arrested in Nigeria. Prior to this incident, Binance was investigated by the Nigerian authorities; it is alleged that Binance caused the rapid depreciation of the Nigerian Naira and Binance is alleged to have engaged in currency manipulation. It is also stated that a decision has been made to block access to the websites of Binance, Coinbase and Kraken in the country. The Governor of the Central Bank of Nigeria stated that in 2023, they found that approximately $26 billion in unidentified crypto assets were transferred to crypto asset service providers. (FT)

DIGITAL RUBLE PROJECT IS EXPANDING IN RUSSIA

Elvira Nabiullina, Governor of the Bank of Russia, announced that the ongoing pilot project of the Digital Ruble, the Russian Central Banks Digital Currency, is on track and that various operations are being tested under the pilot project, including the opening of wallets and the execution of several transactions using smart contracts. So far, more than 25 thousand transactions have been carried out using the Russian Digital Ruble, and it is planned to expand the pilot project later this year, President Nabiullina said. At the current stage of the pilot project, twelve credit organisations, about 600 individuals and thirty commercial and service companies from eleven cities took part in the project tests. (TASS)

CRYPTO ASSET TRANSACTION FEES ON THE RISE

After a period of decline in the network fees required for on-blockchain transfers in bitcoin, the cost of bitcoin transfers has started to rise again, reaching US$11.48 per transaction on a weekly basis. In February, the cost of an average transaction on the bitcoin network was below the US$5 threshold, and the cost of an average-sized transaction did not exceed US$2. Following the rise in the bitcoin price, the total number of transactions on the network increased as daily transfers increased. Bitcoin miners also averaged 430,000 transaction verifications per day in February, roughly the same as in January 2024. (CryptoMeter)

CRYPTOASSET LEGISLATION WEAKNESSES IN RUSSIA

Russia's FATF compliance level has been reduced due to weaknesses in crypto legislation. The Financial Action Task Force for the Prevention of Money Laundering (FATF) has lowered Russia's compliance level due to weaknesses in crypto asset legislation in Russia. In the assessment at the last General Assembly, following the freezing of Russia's FATF membership, Russia's status, which was at the highest level of compliance in terms of monitoring and combating suspicious transactions involving virtual assets, was downgraded to 'partially compliant'. The reason for the rating is thought to be Russia's law on digital financial assets. (FATF)

BITCOIN FLAG TO BE PLACED ON EVEREST AGAINST INEQUALITY

A 23-year-old crypto asset owner plans to raise awareness about financial literacy in the world by climbing Mount Everest and planting an orange flag with the bitcoin logo at the top of the mountain. He announced in a tweet that he plans to climb the mountain in April and May this year and plant a bitcoin flag at the peak before returning to Everest's base camp. The crypto owner explained that the purpose of his climb was to highlight "global inequality in access to financial education". It is known that Yousuf bought around $340 worth of bitcoin in 2011, and his current net worth as of January 2022 is more than $300 million. (CoinTelegraph)

EL SALVADOR WILL NOT SELL THEIR BITCOIN

El Salvador's President, Nayib Bukele, spoke about the status of El Salvador's own bitcoins following the rise in the price of bitcoin. In September 2021, in the country where bitcoin has been accepted as official currency alongside the US dollar, Bukele announced that crypto assets belonging to El Salvador will not be sold. "At the end of the day, 1 BTC is equal to 1 BTC," Bukele said, referring to the recent increase in the price of bitcoin, explaining that the market price of bitcoin is now very high, that if the country were to sell the bitcoins in its hands, it would make more than 40% profit, and that the citizenship programme implemented in exchange for bitcoin provides resources to the country. (Twitter)

CRYPTO ASSET PONZI-SCHEME FOUNDERS CAUGHT IN ARGENTINA

In Argentina, two founders of Braiscompany have been arrested and charged with fraud for setting up a Ponzi scheme in Brazil with crypto assets worth a total of more than $400 million. The founders were arrested in a joint operation by the Argentine Federal Police and Interpol, despite using false identities. The founders, who have been the subject of an active Interpol search since March last year, were sentenced in Brazil in February 2024 to 88 years and more than 61 years in prison for crimes against the financial system, money laundering and capital market offences. It is understood that the founders were located and arrested in Argentina after their transactions were traced using false identities. (FinanceFeeds)

EU'S AI ACT APPROVED BY MEMBER STATES 

The European Artificial Intelligence Act, known as the "AI Act" in Europe, has been unanimously approved by the representatives of the member states of the European Union. Contrary to previous press reports that Germany, France, Austria and Italy might reject the Act, it was announced on 2 February that the Act had been unanimously approved by the representatives of the Member States. Following the vote, it is stated that a balanced and futureproof text, promoting trust and innovation in trustworthy AI is adopted. Following the approval of the member states in the Council of the EU, the next step is the approval of the bill in the European Parliament. In the European Parliament, the internal market and civil liberties committees will vote on 13 February. After passing the committees, the final plenary vote in the European Parliament is expected to take place on 10 or 11 April. No opposition to the AI Act is expected in the committees or in the Parliament. (IAPP)

1 BILLION CRYPTO RANSOM PAID IN 2023

In a recent report made by blockchain analytics firm Chainalysis, it is announced that payments resulting from ransom attacks linked to crypto assets reached $1 billion in 2023. The year before, the figure was around $567 million. Hospitals, schools and public institutions are among the main targets of software known as ransomware, which locks files on a user's computer and forces them to pay a fee to unlock them. However, there have also been ransomware incidents affecting organisations (e.g. MOVEit) ranging from the BBC to British Airways. These statistics highlight the changing nature of the cyber threat. While ransomware incidents are on the rise, losses from other types of crypto-related crime, such as fraud and hacking, are set to fall in 2023. (Chainalysis)

ETHIOPIA BECOMES THE NEW LOCATION FOR BITCOIN MINERS

Following China's restrictions on bitcoin mining in 2021, Africa, and Ethiopia in particular, has recently become popular with miners looking for new locations. Although Ethiopia has banned the trading of crypto assets, it has given the green light to bitcoin mining operations from 2022. Miners are known to consume a lot of energy as they compete for new bitcoins. Therefore, countries where it is allowed and where electricity is cheap are becoming favourites for miners. For example, Kazakhstan and Iran, which have similar characteristics, were at the forefront of bitcoin mining before turning their backs on the sector due to high energy consumption. More recently, Ethiopia has become the new location for bitcoin miners, especially the Chinese, as it is one of the countries with the cheapest electricity in the world. Over the past 10 years, China has provided $4.8 billion in aid for the construction of the Grand Ethiopian Renaissance Dam, Africa's largest dam. Small-scale mining operations have also sprung up around the dam in recent years. Since last year, deliveries of mining equipment have been arriving at these addresses. (Cryptonews)

BİNANCE LAUNCHES REWARD PROGRAMME TO COMBAT INTERNAL CORRUPTION

Following a series of public accusations over leaks related to the listing of the Ronin (RON) token, cryptocurrency exchange platform Binance has called on the public and announced a reward of up to $5 million for information on any corruptions among employees. In a Twitter post on 5 February, Binance co-founder Yi He addressed the controversy caused by the decline of RON after it was listed on Binance. Yi He announced that internal regulations have been put in place by acknowledging the problem of information leakage, stating that stricter measures will be implemented for team members involved in the listing process who are found to have leaked information, and added that technical monitoring processes will also be improved to detect possible leaks. RON rose more than 30% in the week leading up to Binance's listing announcement; and it lost 18% immediately after Binance the listing actually began. (Coinmarketcap)

PROMETHEUM, THE ONLY SEC-APPROVED CRYPTO PLATFORM, CHOOSES ETHEREUM AS ITS FIRST PRODUCT

Prometheum, the only SEC-approved crypto platform in the US, announced in a Twitter post on 7th February that it will start offering custody services for crypto using Ethereum (ETH). It is stated that the operation will start by the end of next month. In doing so, the company is trying to open up a new route in the industry by holding its clients' ETH.  ETH is said to be considered a security. Prometheum received SEC approval in May 2023. Prometheum's choice of ETH as its launch currency may cause some controversy. Unlike bitcoin (BTC), which the SEC has explicitly stated is not a security and therefore not under its jurisdiction, it is unclear at this stage what the SEC's position will be on whether ETH is a digital token that should be considered a security and therefore under its jurisdiction. (Coindesk)

URGENT CALL FOR ENERGY INVESTIGATION FOR BITCOIN MINERS BY US DEPARTMENT OF ENERGY

The rise in the price of bitcoin over the past year has prompted the US Department of Energy to launch an urgent investigation into crypto miners. The US Energy Information Administration ("EIA") has announced that it is launching an investigation into the energy consumption of US-based cryptocurrency mining companies. The investigation is said to have been requested by the Office of Budget and Management, which operates within the Office of the President under President Joe Biden, under the title of "Urgent Data Collection". As part of the emergency investigation, crypto-mining companies will be asked to provide detailed information and documentation on their energy consumption. In this way, the impact of crypto mining activities on the energy system will be analysed. (Cryptobriefing)

ARGENTINE GOVERNMENT WITHDRAWS TAX REGULATION ON CRYPTO ASSETS

The Argentine government has decided to withdraw the tax regulation on crypto assets from the bill submitted to Congress and included in the 61st edition of the Crypto Bulletin. The regulation did include crypto assets in the tax base, but provided some tax benefits by encouraging taxpayers to declare crypto assets. It is stated that the removal of the crypto tax from the draft bill was done by the government to counter public opposition, national strikes, protests and criticism of the draft. However, it is stated that profits from the purchase and sale of significant amounts of cryptocurrency will be subject to income tax if they exceed certain thresholds. Congress has until 15 February to decide on the future of the bill. (Cryptonews)

DECISION ON DEPORTATION OF TERRA FOUNDER FOUND IN MONTENEGRO REVERSED ON APPEAL

The Montenegrin Court of Appeal overturned the extradition decision of Do Kwon, the founder of the bankrupt cryptocurrency platform Terraform, at the appeal hearing on 7 February, after Kwon's lawyers appealed the decision. This decision was noted as another of the many decisions made in the complicated extradition process. The case for Do Kwon's extradition to the US or South Korea will be reconsidered by the first instance court in Montenegro. Kwon was caught trying to leave the country using false travel documents in March 2023. South Korean and US authorities accuse Terraform Labs and its co-founder Kwon of orchestrating a fraud scheme that cost investors billions of dollars. (Cointelegraph)

THAILAND REMOVES VAT FROM CRYPTO REVENUES

Aiming to make Thailand the region's digital asset hub, the Ministry of Finance has suspended the requirement to pay 7% VAT on income from crypto asset and token transactions. The ministry announced a VAT exemption on digital asset trading, effective from 1 January 2024, to put Thailand on track to become a digital asset hub. The exemption, which previously only applied to authorised digital asset exchanges, will now also apply to brokerage firms registered with the country's stock exchange. In Thailand, which has a crypto-friendly prime minister, Binance had also made a significant investment in Thailand. (Bangkokpost)

FIRST SPOT BITCOIN ETF APPLICATION FILED IN HONG KONG

The Hong Kong Securities and Futures Commission has reportedly received the first spot bitcoin ETF application, just weeks after the US Securities and Exchange Commission approved the first spot bitcoin ETF in the US. According to the news, Harvest Hong Kong, one of China's largest fund managers, applied for a spot bitcoin ETF to the Hong Kong SFC on 26 January. It is reported that Hong Kong's market regulator may take a similar approach to the US SEC and approve multiple spot ETFs at the same time to ensure compliance. Hong Kong has become one of Asia's leading crypto centres thanks to the authorities' pro-crypto approach in 2023. (Cointelegraph)

JP MORGAN CRYPTO ASSET SURVEY OF INVESTORS

According to the results of a survey of 4000 institutional investors conducted by JPMorgan, more than half of institutional investors want to stay away from crypto assets. Only 7% of the institutional investors surveyed believe that blockchain technology is an effective technology. This is a significant drop from the previous year's figure of 25%. 78% of the survey respondents do not plan to trade crypto assets in the next five years. In addition, 61% of institutional investors believe that artificial intelligence and machine learning will shape the future of trading in the next three years. (Coindesk)

GUIDANCE FOR CRYPTOASSET SERVICE PROVIDERS IN THE EU

The European Banking Authority (EBA) has published a guide for crypto asset service providers on the risks of money laundering and terrorist financing. The guidance includes some measures that companies operating in the European Union may adopt in relation to anti-money laundering (AML). The EBA statement underlines that crypto asset service providers are vulnerable to financial crime and that they are at particular risk from an AML perspective. It is stated that the risk is high, especially considering the speed of transactions that users can make and the possibility of concealing identities. For this reason, the EBA states that it is important for crypto asset service providers to be aware of the AML risks and to implement measures to effectively mitigate these risks. In this context, the EBA states that it aims to extend the risk-based approaches of these companies by extending the measures and actions proposed for banks to crypto asset service providers.  (European Banking Authority)

CRYPTO ASSET RISKS OF BANKS IN THE EU TO BE INVESTIGATED

The head of the European Banking Authority (EBA) has announced that the EBA, together with other EU authorities, will take a closer look at the links between banks, funds and other non-bank financial institutions, including crypto-asset service providers, due to growing concerns about the potential spread of risks in the whole economic system. In this context, the EBA, the European Systemic Risk Board (ESRB) and the Financial Stability Board (FSB) will conduct a joint investigation, examining banks and other non-bank financial institutions, such as investment funds, crypto-asset service providers and other financial services firms, with the aim of identifying risks in the system as a whole and taking measures against the possibility of their spreading of those risks. (European Banking Authority)

APPROVAL OF BIOTCOIN ETFS BY THE SEC IN THE USA AND WHAT HAPPENED BEFORE

The United States Securities and Exchange Commission (SEC) announced on 10 January 2024 that they have approved spot bitcoin exchange traded funds (ETFs). It was stated that the SEC has approved 11 different spot bitcoin ETF applications. It was also noted that the vast majority of crypto assets are in the form of an investment contract and therefore subject to the federal securities laws in the US.  (Bloomberg)

However, before the SEC made the above statement, an interesting event took place on 9 January. Following a successful hacking attempt on the @SECGov Twitter account used by the SEC, a fake tweet was sent out announcing the approval of bitcoin ETFs. Following the attack, it was announced that the attack on the SEC's Twitter account was a SIM swap attack and that the two-factor authentication had been disabled by the staff using the Twitter account, resulting in the phone number being captured and the password being reset. (Cointelegraph)

AML AGREEMENT BETWEEN THE EUROPEAN PARLIAMENT AND THE COUNCIL

In line with the preliminary agreement between the European Council and the European Parliament, new regulations on the AML obligations of crypto-asset service providers are envisaged in the European Union. Under the Agreement, crypto assets service providers will be added to the list of entities within the EU that are obliged to prevent the laundering of the proceeds of crime and the financing of terrorism. As a result, crypto-asset service providers will also be required to obtain and verify the identity information of their users for transactions exceeding USD 1,090 or EUR 1,000 under the know your customer obligations. The text of the agreement will then be submitted to the EU and then member states for the approvals. (FT)

CHAINALYSIS 2024 REPORT HAS BEEN PUBLISHED

The "2024 Crypto Assets Crime Trends Report" prepared by Chainalysis has been released this week. In the report, it is stated that the total value of illegal crypto asset transactions and wallets in 2023 is considered to be $24.2 billion, which is significantly down from $39.6 billion in the previous year. However, it was also stated that this amount could increase, as it reflects only those that have been detected from events in 2023. The report also found that illegal transactions involving stable coins have surpassed bitcoin in the last year. The reason for this is believed to be that the increased prevalence of stable coins makes them more likely to be used in illegal transactions. (Chainalysis)

BITCOIN BASED RENTAL AGREEMENT IN ARGENTINA

In Argentina, one of the first contracts involving payments in bitcoin has been signed, marking a milestone in the country's adoption of crypto assets as a means of payment. Following an executive order issued by President Javier Milei on the use of the Argentine peso for payments, one of the first rental agreements in Argentina has been registered using bitcoin. The lease agreement stipulates that the tenant will pay the landlord the equivalent of 100 USDT in bitcoin each month to make rental payments in exchange for the use of the house. Given the state of the currency in the country, it is noted that payments and agreements made in bitcoin may increase in the future. (Bitcoinworld)

DECISION FROM THE US COURT ON THE USE OF BITCOIN

A federal court in the US has allowed the use of information contained in a bitcoin transaction to notify one of the parties to a civil lawsuit. The case, which is said to be the first in which the applicability of this method has been accepted, recognized that the information contained in bitcoin transactions can be used in cases where the identity of the parties cannot be established. This is the first time that bitcoin has been accepted as a means of notification in a civil case. In this context, the text requested by the court was included in a transaction sent to the wallet address of the crypto asset involved, and a Google Drive link to a copy of the case file was also included in the text.  (News Bitcoin)

RESEARCH ON THE NUMBER OF CRYPTO ASSET USERS

In the annual crypto industry report prepared by Crypto.com, it is stated that the total number of crypto asset owners globally, which was 432 million in January last year, increased by 34% in 2023 and reached 580 million as of December. As part of the report, it is noted that bitcoin ownership increased by 33% compared to last year, while Ethereum ownership increased by 39%, experiencing a higher increase than bitcoin. In the report, before entering 2024; It is stated that the number of bitcoin owners reached 296 million, accounting for 51% of the total, while Ethereum owners correspond to 21% of the total number of people as 124 million people. (Crypto com)

PRESIDENTIAL CANDIDATE TRUMP MAKES A STATEMENT REGARDING CBDC

Donald Trump, who is a candidate for the presidential elections to be held in the United States on 5 November 2024, promised during his speech in Portsmouth that "I will never allow the creation of a central bank digital currency (CBDC)" in the US. Communicating that CDBCs would be a major threat to the country's sovereignty, Trump said he would prevent them from coming to America. According to Trump, the establishment of such a currency could undermine the absolute dominance of the federal government's control over the US currency and economy. Trump went on to say, “They can take your money and you won't even know it's gone.” (Politico)

WEB 3 INVESTMENTS IN DECLINE

According to a research report by crypto asset service provider Binance, the top ten leading WEB 3 projects saw a significant decline in venture capital investment in 2023. According to Binance's report, the top ten WEB 3 projects in 2023 raised a total of $1.78 billion in investment. However, this amount is about 70% lower than the $5.87 billion raised in the previous year. According to the report, WEB 3 projects also managed to attract a total investment of $9 billion. However, despite this proportional decline, all of the top ten WEB 3 projects still managed to raise more than $100 million. The report also notes that more than 36 per cent of this investment was in infrastructure projects using WEB 3 technology. (News Bitcoin)

USE OF SUSTAINABLE ENERGY IN BITCOIN MINING

A study conducted by Daniel Batten found that the energy used in bitcoin mining is the highest sustainable energy use percentage ever recorded. According to Batten's research, 54.5 percent of the energy used in bitcoin mining comes from sustainable sources, and the mining industry directly reduces 7.3 percent of all emissions from its operations. It is stated that these rates are record levels for bitcoin mining. Batten also states that the rate of sustainable energy used in bitcoin mining is very high compared to other industries, and that the bitcoin mining sector is the only industry in the world that is largely supported by this type of energy. (News Bitcoin)

ANOTHER STATEMENT FROM MEHMET ŞİMŞEK ABOUT THE REGULATION ON CRYPTO ASSETS:

According to the news made by Anadolu Agency on 10 January 2024, Minister of Treasury and Finance Mehmet Şimşek made some statements about the legal regulations regarding crypto assets. According to the news, Minister Şimşek stated that the technical details of the legal regulation have reached the final stage and stated that the interest in the trading of crypto assets has increased during the pandemic. However, stating that this situation brings its various risks, Şimşek stated that they have taken steps to reduce these risks in accordance with international regulations and that this is important in order to delisted from the grey list under FATF. Noting that the main objective of the study on legal regulation is to regulate the platforms and the transactions carried out on the platforms, Şimşek said, "Crypto asset trading platforms will be licensed by the Capital Markets Board (“CMB”) and obligations regarding minimum operating conditions will be introduced. These conditions; requirements for founders and managers, capital requirements, organizational requirements, and obligations regarding information processing infrastructure. The details on the subject will be determined by secondary regulation. He also stated that the definitions included in the regulation are intended to be created in the most inclusive manner in accordance with international regulations. In addition, Minister Şimşek stated that the tax issue is not the main focus of the regulation and that this issue will be studied separately, and that the CMB has been authorised to determine additional principles and principles regarding the current regulation.

JAPANESE E-COMMERCE APPLICATION ALLOWS PAYMENT WITH BITCOIN:

The e-commerce platform Mercari, which generally sells second-hand goods and similar products and has more than 22 million active users, announced that it will offer its users the opportunity to pay with Bitcoin. Product prices will still be shown in Japanese Yen, but payments can be made in Bitcoin. The system for Bitcoin payments is planned to be implemented by June. Payments to be made in Bitcoin will be made through Melcoin, a Tokyo-based subsidiary of the company. In this context, Melcoin will serve as an intermediary that transfers Bitcoin to the seller in Japanese Yen. Mercari had previously established a platform that allows Bitcoin trading. In this context, the company continues to take steps regarding crypto assets.

APPLE HINDERS CRYPTO-ASSET PROVIDERS:

Technology giant Apple has removed some service providers, including Binance, from the App Store in India, one of the countries where crypto assets are traded the most. In addition to Binance, it is stated that the applications of service providers such as Kucoin, OKX, Huobi, Kraken, Gate.io, Bittrex, Bitfinex have also been removed from the App Store. Indian citizens will no longer be able to access these service providers, which allegedly do not operate as regulations in the country, through Apple. The reason for the removal of the applications from the App Store in India is that the Financial Intelligence Unit (FIU), one of the country's regulatory agencies, requested the Ministry of Information Technology to block access to the platforms in question. In addition to the request to block the "URLs" of the relevant platforms, Apple was also requested to remove the platform applications. However, the apps are still available on the Google Play Store.

OKX COMPLIES WITH UK REGULATIONS:

Crypto asset service provider OKX has published a notification that it will comply with the regulations introduced by the UK Financial Conduct Authority (FCA). According to the published information, it was stated that there will be significant changes in the use of OKX. Accordingly, users must pass two surveys under the name of customer categorization and suitability assessment. Within the scope of these surveys, investors' profiles are classified, users are informed about some risks, and investors are asked a number of questions about investing in crypto assets.

CENTRAL BANK OF SPAIN SELECTS PARTNERS FOR CBDC TESTS:

The Bank of Spain has selected the institutions to cooperate in the tests for the central bank digital currency (CBDC). Among the 24 applications made on the announcement made last year, the Central Bank selected 3 companies named Cecebank, Abanca and Adhara Blockchain. Within the scope of the pilot application, which will be carried out in the next 6 months, a simulation will be made in the form of a single tokenized CBDC of interbank payments and the exchange of other CBDCs issued by different central banks. In addition to this test, an experiment will also be conducted in which the CBDC will be used to pay a tokenized bond.

JAPANESE GOVERNMENT AMENDS CRYPTOCURRENCY TAXES:

In Japan, the government will make changes to the regulation on taxes to be obtained from cryptocurrencies. Accordingly, with the planned change, companies will be under the obligation to pay tax only on realized gains from their earnings from cryptocurrencies. No tax will be due unless the gains are realized. Only the earnings obtained through the sale of owned cryptocurrencies will be subject to tax. The amendment is expected to enter into force on April 1^st, 2024, the beginning of Japan's fiscal year. However, before that, this change must be approved by the parliament.

SOUTH KOREA SEEKS TO RESTRICT CRYPTO ASSET TRANSACTIONS USING CREDIT CARDS:

South Korea foresees a number of risks for its citizens to carry out crypto asset trading transactions with credit cards. According to the announcement made by the Financial Services Commission (FSC) on January 3^rd, 2023, it is stated that in the purchase of crypto assets from foreign crypto asset service providers, illegal money outflows from the country may occur and some risks may arise in money laundering. The FSC recommends changes to the credit finance laws in the country. According to the news, public opinion is being sought for the proposal, which is still in the form of a proposal at this stage. Then, it is planned to take action for implementation in the first half of 2024.

TRADING VOLUME IN CRYPTO EXCHANGES EXCEEDED 1 TRILLION DOLLARS IN DECEMBER:

The crypto asset market, which has undergone turbulent periods in recent years, exceeded $ 1 trillion in trading volume in the last month of 2023, crossing the $ 1 trillion threshold for the first time since September 2022. It is stated that the reason why the transaction volume reached this level again after 1 year is the expectation that the SEC, the US financial regulatory agency, will accept Bitcoin spot EFTs. On the other hand, although the trading volume has exceeded $ 1 trillion after a long break, it is still far from the all-time high volume of $ 4.19 trillion in May 2021.

PARIBU HAS BECOME THE TAX RECORD HOLDER IN ITS FIELD OF ACTIVITY:

The technology company Paribu, a cryptocurrency trading platform, has been named the most taxpaying company in its field of activity in the 2021-2022 corporate tax list announced by the Revenue Administration on 3 January 2024. Paying approximately 700,000,000 Turkish lira corporate tax in 2021, Paribu ranked 23rd among the 100 taxpayers who declared tax in this field. At the same time, Paribu is among the top 10 companies in the ranking of companies providing services in the field of finance. Commenting on the issue, Yasin Oral, CEO of Paribu, said, "Paribu leads the sector in every field. With the trust of more than 6 million users, we will continue our success by acting accurately, transparently and in accordance with our values and responsibilities."

DIGITAL TURKISH LIRA PHASE ONE EVALUATION REPORT PUBLISHED:

The first phase evaluation report of the Digital Turkish Lira Project conducted by the Central Bank of Republic of Türkiye (“CBRT”) was published on the CBRT website. In the report, it was announced that the findings of the R&D studies and the first phase carried out with the Digital Turkish Lira Collaboration Platform stakeholders and the approaches adopted in the project were shared. The 63-page report consists of definitions, central bank digital currency requirements, principles and approaches, digital Turkish lira design, findings and evaluations, next phases and conclusion.

GUIDANCE ON THE USE OF ARTIFICIAL INTELLIGENCE BY JUDGES IN THE UK:

The UK Judicial Office published a guidance dated 12 December 2023 on the use of artificial intelligence in judicial activities. The guidance was prepared by a group of members of the judiciary to assist members of the judiciary. It is noteworthy that the guidance was published despite examples where artificial intelligence has led to bad results in the legal system. The UK Judicial Office, which supervises judges, has published a guidance that reveals how artificial intelligence can be useful in judicial activities. The guidance warns not only the judges, but all the elements involved in the entire judicial activity to be alert to potential risks. It is stated that public versions of AI tools are inherently publicly accessible and therefore no private/confidential information should be entered into them. The guidance also highlights areas where the use of AI is not recommended. For example, it is recommended not to use AI for legal research and legal analysis, as it is weak in finding new information that cannot be independently verified. The report also provides some clues to recognize when a petition has been drafted by AI. According to the statement, as AI technology continues to develop, this study will be reviewed and questions and feedback from members of the judiciary will be considered.

DECISION OF THE TURKISH PERSONAL DATA PROTECTION BOARD ON CRYPTO ASSET SERVICE PROVIDERS:

According to the decision of the Personal Data Protection Board (“Board”) published on 27 December 2023, a complaint was filed on the grounds that a crypto asset service provider processed personal data more than necessary and disproportionately by requesting the photograph of the front and back of the ID card of the persons together with their own photograph to upgrade the membership level on its platform. As a result of the investigation, it was determined that the services offered by the company can be used up to a certain limit with a standard membership (T.R. ID number, name, surname, mobile phone, date of birth and e-mail address information), and for advanced membership, which is required to perform certain transactions such as withdrawing cryptocurrencies, it is necessary to share the front and back side of the ID card and a photograph of a piece of paper on which a certain statement and the date of the day are written together with the photograph. In its assessment, the Board drew attention to the company's field of activity and stated that there is a possibility of money laundering in the crypto asset sector in general. Accordingly, the Board did not take any action regarding the complaint, stating that there is a public interest in identifying the identity of the users in this way, that it is based on the processing condition of "expressly provided by the law" and that it is in accordance with the law.

SPOT: BITCOIN IS CAUSING A STIR IN THE US AS 2023 DRAWS TO A CLOSE:

In the last weeks of the year, the US Securities and Exchange Commission (“SEC”) received spot Bitcoin ETF applications from many companies. Spot ETF (Spot Exchange-Traded Fund) is a tool that allows investors to take a position in an asset or group of assets without physically owning them. Thus, if approved by the SEC, exchange-traded funds that invest directly in Bitcoin will be traded. The decision on Spot Bitcoin ETF applications is expected to be made in the first days of January. RK Invest, BlackRock, Grayscale and 21Shares are among the companies applying for Bitcoin ETF. 7RCC, on the other hand, draws attention with its application for a spot Bitcoin ETF application focusing on environmental, social and governance (ESG) principles. Experts state that if SEC approval is granted as expected, this will be a milestone for crypto investors.

BLOCKCHAIN IS INCREASINGLY BEING ADOPTED IN THE FINANCIAL SECTOR:

By the end of 2023, it is seen that blockchain is increasing its weight in the financial sector despite many reservations. Major financial institutions such as JPMorgan, HSBC and Franklin Templeton are increasing their blockchain-related activities, accelerating the pace of distributed ledger technology (DLT) adoption within traditional finance systems. For example, JPMorgan conducted its first DeFi transaction on a public blockchain in November. HSBC also tested tokenized deposits in November and partnered with Ripple-owned technology firm Metaco to hold tokenised securities on its custody platform. Franklin Templeton executive Sandy Kaul stated that global traditional financial markets would be reshaped for the first time ever.

2023 WAS THE YEAR OF BITCOIN'S RISE:

Bitcoin has gained approximately 165 per cent this year after the previous two challenging years. Shares such as Coinbase, MicroStrategy and Grayscale Bitcoin Trust, which are closely linked to cryptocurrencies and traded on the stock exchange, outperformed Bitcoin, gaining more than 300%. Even some Bitcoin mining companies attracted attention by rising approximately 700%. Bitcoin's share in the crypto market also rose above 50%, while the value of the crypto market in general nearly doubled compared to the end of 2022, reaching $ 1.7 trillion.

EUROPEAN PARLIAMENT BRIEFING REPORT ON THE USE OF BLOCKCHAIN AND CRYPTO ASSETS:

On 13 December 2023, the European Parliament published a briefing on its official website, named "Understanding Crypto Assets: The Use and Challenges of Blockchain Technology". The briefing aims to provide an overview of the areas of usage and challenges of distributed ledger technology ("DLT"), which is now more than 10 years old, based on the information published so far. The report emphasizes that blockchain applications, especially cryptocurrencies, have become very popular, but many people still do not know how this technology works. It is stated that there are various dimensions of blockchain, such as tokens (values in the digital ledger), tokenization (using blockchain for existing assets) and smart contracts (predetermined computer programs that are self-executing when conditions are met); however, in order to understand each crypto asset, it is necessary to examine it specifically. The briefing points out that the use of blockchain for currencies (cryptocurrencies) was born from analyzing the shortcomings in the traditional financial environment. After more than a decade with cryptoassets, a number of controversial issues are addressed, from consumer protection to protecting the economy from criminal proceeds and the carbon footprint impact of cryptoassets.

2.85 BILLION SETTLEMENT BETWEEN BINANCE AND THE CFTC:

A federal court in the US has approved a settlement between Binance and its former CEO Changpeng Zhao and the Commodity Futures Trading Commission ("CFTC"). According to the statement made from the CFTC, the court found that Zhao and Binance violated the Commodity Exchange Act (CEA) and CFTC regulations and imposed a $150 million fine against Zhao personally and ordered Binance to reimbursed $1.35 billion in transaction fees earned while conducting unregistered activities and to pay the same amount ($1.35 billion) as penalty to the CFTC. Binance also recognized that anyone wishing to become a new customer, whether through a primary or "sub-account", must complete KYC procedures. This decision was one of the most important sanctions taken against a crypto exchange up to today.

NEW MOVES FOR WEB3 FROM CHINA:

The Chinese central government has announced strategic plans to guide the development of China's Web3 ecosystem. Accordingly, Web3 technologies such as NFTs and DApps will be supported in multiple directions. Other important areas to focus on include cross-chain interoperability, data security and smart contracts. The government will also support organizations that will conduct technical research in these areas. China also aims to actively participate in global standardization activities related to Web3. Thus, it is thought that China's international influence and rule-making power will increase in Web3 development. On the other hand, China's Ministry of Public Security plans to implement a new blockchain-based platform called RealDID to verify the real identities of its citizens.

CRYPTO REGULATION FROM ARGENTINA'S NEW GOVERNMENT:

Javier Milei, the new president of Argentina, known for his pro-crypto stance in the election campaign and on the agenda with the decisions he took after taking office, continues his efforts to make Bitcoin more widely used. The government has announced a new draft law like tax peace regarding the assets that taxpayers have not declared to the public. Accordingly, crypto assets are among the assets that taxpayers must declare, just like cash or immovable assets. In this regard, citizens who declared their cryptocurrency assets before 31 March 2024 will be subject to a 5% tax rate for them; this rate is expected to increase to 15% as of 30 November 2024. Diana Modino, Argentina's Minister of Foreign Relations and International Trade, announced last week on her X account that they will now authorize contracts with Bitcoin and other crypto asset units in Argentina.

EPIC GAMES HAS CHANGED ITS POLICY TO ONCE AGAIN ACCEPT BLOCKCHAIN AND NFT GAMES:

Epic Games Store, the digital distribution store owned by Epic Games, announced that it will allow some blockchain games to be listed on its platform again. Some blockchain games were characterised as "Adults Only" ("AO") due to the possibility of offering the opportunity to exchange earned cryptocurrencies for "real money". Epic Games had removed AO-rated games from its platform. However, according to a recent announcement by the company, the policy has been changed. Accordingly, an exception is being made for blockchain and NFT games, despite their AO rating. However, these games still must comply with existing guidelines. On Steam, another major digital distribution platform, blockchain and NFT games have been banned since 2021.