INFORMATION NOTE ON THE FRAMEWORK CONTRACT OBLIGATION FOR CRYPTO ASSET SERVICE PROVIDERS
Pursuant to the Communiqué on the Principles of Establishment and Operation of Crypto Asset Service Providers (III-35/B.1) ("Communiqué"), crypto asset service providers ("CSPs") are required to offer a framework agreement ("Framework Agreement") to their customers. The main regulation regarding the Framework Agreement is Art. 22 of the Communiqué, which entered into force on 13/03/2025. Therefore, a Framework Agreement must be provided to all customers of the CSDs immediately.
Pursuant to the Provisional Article 1 of the Communiqué, the existing framework agreements signed with the existing customers of the KVHSs whose application is deemed valid must be renewed in accordance with the provisions of the Communiqué until 31/12/2025. This renewal can be made electronically.
Some regulations regarding Framework Agreements are included in the Communiqué on the Operating Procedures and Principles and Capital Adequacy of Crypto Asset Service Providers (III-35/B.2) ("Operating Procedures and Principles Communiqué") and are provided below for your information.
- Scope and Form of Framework Agreement
Pursuant to Article 22/1 of the Communiqué, a Framework Agreement is a contract that regulates the relationship between the CSPs and the client, is concluded once at the beginning and constitutes the basis of individual transactions.
PPPs are obliged to conclude a framework agreement in writing or by means of remote communication before starting transactions with their clients.
In terms of form, the Framework Agreement shall;
(i) In writing,
(ii) by distance through the use of means of remote communication,
(iii) via an information or electronic communication device determined by the Board as a substitute for the written form, regardless of whether it is distance or not
is obligatory.
- Establishment of the Framework Agreement at a Distance
Pursuant to Article 20/2 of the Communiqué, the conditions to be complied with in the event that the activities of determining the identity of the customer and the establishment of the framework agreement are carried out at a distance are regulated.
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DISTANT TRANSACTIONS |
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Subject to the provisions of Communiqué numbered III-42.1. |
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In case the Framework Agreement is established electronically; 2.1. the provisions of Communiqué No. III-42.1 shall apply. 2.2. it is not necessary to provide the client with a copy bearing a stamp and signature. 2.3. (i) provide a copy of the contract to the customer or, (ii) transmitted to the electronic mail address to be declared by the client or, (iii) it is obligatory to provide electronic access and viewability of the agreement by informing the customer. |
- Establishment of the Framework Agreement in Writing
Article 22/3 of the Communiqué contains the details regarding the written form of the framework agreement.
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ESTABLISHMENT OF THE FRAMEWORK AGREEMENT IN WRITING |
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1. Contracts shall be issued with consecutive sequence numbers. 2. Contracts shall be issued in at least one copy. 3. The copy given to the customer must bear the phrase "As original", the signature of the certifier and the stamp of the KVHS. 4. The copy remaining in the PDPA must contain the statement that the customer has received a copy and the signature of the customer. |
- Modification of Framework Agreement Provisions in Electronic Environment
Pursuant to Article 22/4 of the Communiqué, the details regarding the ability to amend the framework agreements electronically are regulated.
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MODIFICATION OF THE PROVISIONS OF THE FRAMEWORK AGREEMENT IN ELECTRONIC ENVIRONMENT |
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In order for the Framework Agreement to be amended electronically; 1. Customer approval has been obtained for making changes to the text of the Framework Agreement electronically 2. Qualified electronic signature is used or the customer's access to the electronic environment is provided with the password assigned to the customer by the platforms; and 3. The Client has given his/her consent electronically that he/she has read and understood the relevant amendments mandatory. |
The provisions of Article 20/2 of the Communiqué shall apply with respect to the burden of proof and retention of information regarding the modification of the Framework Agreement electronically.
- Minimum Elements to be included in the Framework Agreement
Article 22/5 of the Communiqué sets forth the minimum elements that a Framework Agreement must contain.
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MINIMUM ELEMENTS TO BE INCLUDED IN THE FRAMEWORK AGREEMENT |
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- Prohibited Provisions in the Framework Agreement
Article 20/6 of the Communiqué regulates the provisions prohibited in the Framework Agreement.
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PROVISIONS PROHIBITED IN THE FRAMEWORK AGREEMENT |
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1. Provisions contrary to capital markets legislation 2. (i) Provisions that seriously prejudice the rights of customers; and (ii) Provisions eliminating or limiting the liability of PDPPs to their clients |
- Renewal of the Framework Agreement due to Change of Party
Article 20/7 of the Communiqué regulates the provisions to be applied in the event of a change in the party to the Framework Agreement.
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SITUATIONS WHERE THE AGREEMENT MUST BE RENEWED DUE TO A CHANGE IN THE PARTY TO THE FRAMEWORK AGREEMENT |
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1. Subrogation in the case of a situation of universal succession (i) the assignment of the contract by the customer to a third party, (ii) the merger or acquisition of the Customer (in the case of a legal entity) with another legal entity, (iii) In the event of the death of the customer, the heirs are entitled to the rights through the right of subrogation, etc. 2. Changes in the beneficiaries of joint accounts (i) Inclusion of new beneficiaries in the joint account, (ii) Separation of existing beneficiaries, etc. |
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WHAT TO DO IF THE CHANGING BENEFICIARIES DO NOT WANT TO CONCLUDE A CONTRACT |
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1. Transfer of rights in the account to the successors-in-interest (in accordance with the documents proving subrogation) 2. Closing the account in question 3. Notification to CRA within three business days |
- Provisions Applicable to Circumstances Not Regulated in the Framework Agreement
In cases where there are no provisions in the Framework Agreements, general provisions shall apply.
- Framework Agreement and the Obligation to Notify the Client of Risks
Pursuant to Article 21 of the Communiqué, the requirements to be fulfilled within the scope of and in addition to the framework agreement to be signed with the customer in terms of CSDs are as follows, and the addressees of CSDs within the scope of the Article are the customers.
Pursuant to Article 21/1 of the Communiqué, a general risk notification is required. This general risk statement should include the following elements.
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WHAT TO DO IN GENERAL RISK DISCLOSURE |
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1. Explain to the client the general risks associated with crypto assets 2. Presenting the Annex/1 Risk Notification Form of the Communiqué to the client 3. To obtain a declaration from the customer that the Risk Notification Form has been read and understood 4. (i) forward a copy of the Risk Notification Form to the client or (ii) Providing access and viewability of the form electronically by informing the customer. |
The form in Annex 1 is referred to as the general risk notification. This form contains the minimum elements and can be enriched by CVDs.
- The Framework Agreement and the declaration regarding the Risk Notification Form must be received together. In terms of form, it is possible to receive a written or electronic declaration.
- Information to be submitted to the Customer in addition to the Risk Notification
Article 21/2 of the Communiqué regulates the additional information to be disclosed to the client in addition to the general risk disclosure.
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INFORMATION TO BE INCLUDED IN THE EXPLANATIONS ACCOMPANYING THE RISK DISCLOSURE |
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1. Amounts or rates of any commissions, fees and taxes related to transactions, 2. Information about the market maker and liquidity provider, if any, 3. Where clients' crypto assets and cash are stored, 4. Whether customer transactions are covered as counterparty and, if so, how to notify this. |
Again, this information;
1. disclosure to the customer,
2. obtain a statement from the customer that the disclosures have been read and understood by the customer,
3. (i) forwarding a copy of the information to the client; or
(ii) making the information electronically accessible and viewable by informing the client
It is an obligation foreseen for KVHSs and is mandatory. In addition, the declaration to be received from the customer within this scope may be in writing or electronically.
The additional information to be disclosed to the customer within the scope of Article 20/2 of this Communiqué should be explained using numerical or concrete examples as much as possible, instead of general and vague statements or references to regulations.
- Framework Agreement Pursuant to the Provisions of the Communiqué on Working Procedures and Principles
Pursuant to Article 10/2-a of the Communiqué on Operating Principles and Procedures, CSDs are required to execute customer orders within the scope of the Platform's order execution policy and the principles set forth in the Framework Agreement signed with the customer.
Article 10/4 of the Communiqué on Operating Principles and Procedures;
"If requested by the customers, the platforms may lock the crypto assets belonging to the network due to the structure of the distributed ledger network and return them in kind at the end of maturity within the scope of the provisions of the framework agreement to be signed with the customers."
" provision. In this context, it is necessary to make arrangements in the Framework Agreement regarding the process of locking the crypto assets belonging to the distributed ledger network upon the request of the customer and returning them in kind at the end of maturity.
When Article 17 of the Communiqué on Working Principles and Procedures is analyzed, the principles regarding the custody of the crypto assets of the customers by the platforms should be included in the Framework Agreement. For example, the second paragraph of the same article specifically states that in the event that the client does not provide a wallet address or the client cannot be reached, the relevant cryptoasset may be sold, i.e. converted into cash, within the scope of the principles specified in the framework agreement. In addition, it is possible to transfer the cash to the client's account or to continue to store the assets on the platform by informing the client about this.
As another issue, pursuant to Article 51/6 of the Communiqué on Operating Procedures and Principles, PDPs may obtain authorization from their customers under the Framework Agreement to monitor the customer's cash held at the bank on an account basis in their accounting systems in line with the activities they are authorized for, their operating policies and the customer's preferences.
Pursuant to Article 51/8 of the Communiqué on Operating Principles and Procedures, CSDs may set a lower limit for the use of cash balances in customer accounts, provided that it is clearly stated in the Framework Agreement.
Pursuant to Article 51/9 of the Communiqué on Operating Principles and Procedures, provided that the cash receivable balances in the accounts of the customers are paid within one business day at the latest upon the request of the customers and the principal is not damaged, the customer cash below the specified limit may be utilized in accordance with the provision in the Framework Agreement in such a way that the return remains on the platform. The cash of customers who do not demand a return may be invested in accordance with the written or electronic approval to be obtained individually from the customers separately from the Framework Agreement, with the return remaining on the platform.
Finally, Articles 10 and 51 of the Communiqué on Working Procedures and Principles mentioned in this study entered into force on 13/03/2025, the date of its publication, and Article 17 will enter into force on 30/06/2025.
- Things to be done after the Framework Agreement is established
Pursuant to Article 23 of the Communiqué, a unique customer number is allocated to each customer when the framework contract is signed.
A customer number cannot be assigned to another customer for 10 years, even after the framework contract is terminated.