On 8 November 2020, Vircon Legal co-founder Erdem Mümtaz Hacıpaşaoğlu spoke at the Blockchain Summit organised by the Hacettepe Law Society, addressing blockchain, crypto-assets and the legal questions they raise.
Classification decides everything that follows
“Is it legal?” is almost never the useful question about a crypto-asset. The useful question is what the asset is, because classification determines which regime applies, who supervises it, and what the issuer must disclose. A token that gives access to a working network, a token that represents a claim on future profits, and a token designed to hold a stable value against a currency are three different legal objects that happen to share a technical format.
The distinction between a utility token and a security token is where most disputes begin. The Howey test formalises the analysis in the United States, and its logic — investment of money, common enterprise, expectation of profit from the efforts of others — travels well as a way of stress-testing a project’s own materials. What a team writes in its marketing is evidence of what it was selling, and no later technical document undoes it.
Activity classification matters just as much as asset classification: holding customer keys, matching orders or converting between fiat and crypto brings a business inside the crypto-asset service provider perimeter and the anti-money-laundering obligations attached to it. Our walkthrough is in The CASP Licence in Türkiye; practice page: CASP / Crypto Compliance and Crypto Assets, Web3 & Regulated Digital Markets.
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