Is it legally possible to impose an attachment on a crypto asset?


Is it legally possible to impose an attachment on a crypto asset?

Invented in the 7th century BC, money develops with civilizations since its invention and is used for many different purposes. Money is an economic instrument which provides persons with the power to buy goods and services and whose importance grows day by day. Every period, it appears in many different forms such as metal, paper and securities. In the world, domestic law, in essence, constitutes the legal basis of money. In addition, new means of payment, such as electronic money and cryptocurrency, emerge with the advancement of technology. With the increase in the frequency of the use of these new instruments by persons, which are used like money in the sense of buying and selling, the necessity of States to make statements and legal arrangements on this matter has come to the fore.

This newsletter provides information on the concept of crypto asset, whether it is legally possible to impose an attachment on a crypto asset, and the legal basis of this proceeding.

What is crypto asset?

In our Country, the regulation issued by the Central Bank of the Republic of Turkey (“the TCB”), i.e., “the Regulation on Not Using Crypto Assets in Payments (“the Regulation”)”, published in the Official Gazette dated 16 April 2021, explains the concept of crypto asset and defines crypto assets as:

“…intangible assets created virtually by using the distributed ledger technology or a similar technology and distributed through digital networks and not qualified as fiat money, bank money, electronic money, payment instrument, security or other capital market instrument”

Cryptocurrency is a decentralized electronic currency. Cryptocurrencies are created using open source systems and are un-backed in the physical world. The use of cryptocurrencies in global transactions takes place much easier and faster, due to the fact that they do not have a physical existence such as banknotes or tokens, which we know in their traditional form.  

Blockchain or blockchain technology can be defined as a technology that is not managed by any authority or center and where data is stored on a distributed network. In the system within the blockchain, transactions and data are listed in succession historically, each transaction bears its own transaction summary and an encrypted hash code called “Hash” pertaining to the preceding transaction. All of this data is of signed and unalterable nature. As the transactions continue increasingly in this way, interconnected chains are formed as a result of the encryption of each data block with the previous block. Since it is open source, all computers can view the persons who carry out these transactions and the transaction dates, and these transactions take place irreversibly.  

The identities of the persons who have transacted in this chain created using blockchain technology are recorded as “user identification numbers” on the entire network. Hash functions, in which all these records are contained, are entered in the system by means of various letters and numbers containing a certain data. The reliability and authenticity of the recording system, each of which is kept differently and uniquely, are ensured by this way. The fact that a different data will emerge with a minimal letter replacement also provides a great advantage in terms of the reliability of the blockchain system.

In the current system, in order to create cryptocurrency, persons use the cryptocurrency mining system called “Mining” and thus, solve problems in electronic environment through software and powerful computers and perform cryptocurrency extraction transactions. Therefore, the first example for cryptocurrencies, which points at the decentralization particularly of major coins, was launched as “Bitcoin” in 2009 and is used commercially in small amounts for many years. As a matter of fact, Bitcoin still continues to be the most known coin today. Apart from that, new “Coins” have emerged over time, and individuals and countries have started to develop projects related to their own cryptocurrencies. Various relevant declarations have been made by national units and national entities of many countries. The United States and China are the leading countries among these. Thus, according to the report prepared by the Blockchain Turkey Platform in May 2020:

“The total market cap of the entire cryptocurrency ecosystem is over $263 Billion”

By this finding, it is once again emphasized how much the cryptocurrency market has developed and will develop over time.  In the circumstances, it would be quite appropriate for countries to assign crypto assets a legal status and to start issuing certain legal arrangements in their own domestic laws in order to prevent a number of problems likely to be experienced in the future. Thus, the first step taken nationwide in this sense is from the Mexican Government, which, under the name of “Fintech Law”, introduces certain provisions on the use of crypto assets. In the future, it is expected that many countries, including our Country, will introduce legal provisions on crypto assets and virtual money and improve the existing regulations.  

Functioning system of crypto assets

Crypto assets are systems protected by blockchain technology and encrypted with key pairs. These key pairs, and accordingly, the person’s crypto assets are stored in electronic wallets created in a personal computer or smartphone environment. Thanks to the electronic wallet, only the information about cash transfer transactions can be transferred without the need to share any personal information. A second method for preserving crypto assets is to open an account in institutions/exchanges that act as an intermediary for crypto asset trading and to keep the crypto assets by transferring them to these accounts.

Crypto assets are traded on cryptocurrency exchanges. Cryptocurrency exchanges are similar to stock markets in the traditional sense. Real (fiat) currencies in the current system, such as TRY, Dollar or Euro, can be deposited and crypto assets can be purchased or conversely, crypto assets can be converted into real currencies. The only notable difference between real money exchanges and crypto asset exchanges is that cryptocurrency exchanges do not require an intermediary such as a bank, etc. The advantage of this system is that transfers can be made directly between users’ wallets, quickly and without transfer costs.

Ownership on crypto assets

Before addressing the ownership on crypto assets, it would be helpful to explain the concept of ownership in general. Within this context, ownership is a real right regarding an asset and is protected by the State under the Constitution and laws. Ownership may be claimed by the holder against anyone, and the rights arising therefrom belong to the holder of ownership. Along with ownership, the concept of possession is also of importance at this point. In essence, these two concepts have meanings quite different from each other. To define a situation as possession, it is sufficient to have an actual dominance or command over a property without the need for ownership.  

As explained above, crypto assets can be kept by persons in two different ways. The first method is to keep the user’s crypto asset via an electronic wallet, and the second method is to keep the instrument in the accounts in the cryptocurrency exchanges.

As mentioned above, crypto assets do not have a physical existence such as banknotes or tokens. This asset, which is a code registered on the Internet and encrypted thanks to the chain system, can be stored in the digital environment via e-wallet or USB. Accessing the data in the wallet that is the first storage method is only possible with the password the user has.  

However, in the second method, in case of opening an account in crypto currency exchanges in Turkey today, users are asked for their identity information, phone numbers, photos and electronic mail details. In addition, these data pertaining to the account holder are recorded and preserved, and the ownership on the crypto asset accounts and the data stored in the accounts can be easily identified.   

In the light of this information, we see that it will be possible to determine the assets owned by the users through intermediary institutions in Turkey.  

Furthermore, by means the attachment notice to be sent to the intermediary institutions during the enforcement proceedings, the account information of the debtor can be requested, and attachment proceedings can be carried out on this basis. On the other hand, regarding how to access asset and account information in cases where persons do not prefer such intermediary service providers, it does not seem possible to obtain this information from the user by compulsorily execution, however, it is not yet known whether a legal arrangement to the contrary will be introduced in the future. Relevant amendments to be made by the Central Bank of the Republic of Turkey and to be made to the laws are eagerly anticipated.

Nonetheless, pursuant to the Regulation on Not Using Crypto Assets in Payments (“the Regulation”)” published in the Official Gazette dated 16 April 2021, the use of crypto assets as a means of payment is prohibited.  

As per article 4 of the Regulation:

“Payment service providers are not entitled to develop business models under which crypto assets would be used directly or indirectly in the provision of payment services and the issuance of electronic money and are not entitled to provide any services associated with such business models.

Payment and electronic money institutions are not entitled to act as an intermediary for any platforms providing services of trading, storage, transfer or issuance of crypto assets or for any fund transfers that would take place through these platforms.”

Pursuant to the above provisions, the use of cryptocurrencies as a direct means of payment is prohibited, and intermediary institutions are prohibited from providing payment services and using crypto assets directly or indirectly in the issuance of electronic money. This legal arrangement on crypto assets does not represent a prohibition on the purchase of crypto assets, however, makes the payment function of cryptocurrency, that is, the purchase of goods and services by means of cryptocurrencies over the Internet, illegal in the purchases and sales made within Turkey.  

It can be said that the cases where the reliability of crypto assets are questioned due to the fact that they do not bear the characteristics of state-controlled fiat currencies, are not of an internationally accepted currency nature and are decentralized etc. make the issuance of these provisions necessary.

Concept of enforcement through attachment

In Turkish law, in cases where the debtor does not fulfill his debts, it is not legally possible for the creditor to collect the debt by force. However, such debt can be claimed through the State. The debt that is due must be paid, regardless of whether it arises from public law or private law. In cases where the debtor does not fulfill this obligation, the debtor is forced to pay his debt through the systems in the enforcement law. In such cases, the creditor may resort to enforcement through attachment, which is one of the ways of compulsory enforcement.  

In the general enforcement proceedings, an attachment is imposed on a convertible and transferable asset of the debtor in accordance with of the procedural rules determined by the Code and then, the asset is accordingly sold through judicial sale and thus, the amount corresponding to the right to claim is paid to the creditor.

Attachable and non-attachable assets under the Enforcement and Bankruptcy Code

In the Enforcement and Bankruptcy Code numbered 2004, as per the first paragraph of article 82:

“The following are non-attachable:

1. State-owned properties, and the properties that are shown not to be attachable by their special laws,

2. All kinds of goods necessary for the debtor, whose economic activity is based on his physical work rather than his capital, to continue his profession,

3. With the exception of valuables such as money, negotiable instruments, gold, silver, precious stones, antiques or ornaments, an item necessary for the debtor and his family members living under the same roof; if there is more than one item used for the same purpose, one of them…”

Thus, the assets on which it is prohibited to impose attachment are listed by the Code.

Apart from those listed by the above article in the Code, there are also other items non-attachable as per the special laws. The following are also non-attachable:   

·        Phone numbers, as per the Communications Law;

·        Domesticated animals, as per article 5 of the Animal Protection Law;

·        BRSA’s properties;

·        Municipalities’ non-attachable properties, as per article 15 of the Municipal Law;

·        Alimony and child support receivables subject to verdict;  

·        Letters of guarantee,

·        Social Security Institution’s properties, retirement pensions under article 93 of the Social Security Institution Law (Exception: alimony and child support receivables, and premium debts)

Within this context, it is possible to say that most of the assets with economic value, other than those that are classified as non-attachable by law, can be attached through enforcement proceedings.   

On the other hand, partly attachable items are listed by article 83 of the Code as follows:  

·        Salaries,

·        Appropriations and all kinds of wages,

·        Beneficial interests and their revenues,

·        Alimonies not based on verdicts,

·        Retirement pays

Virtual asset service providers shall carry out detailed identification during each transaction exceeding a certain amount, and suspicious transactions shall be reported to the Ministry of Treasury and Finance regardless of the amount. The imposition of attachment on the assets listed above can only take place partly and conditional upon the deduction of the amount assessed by the bailiff for the maintenance of the debtor and his family, as determined by the Code.

Along with all these, the issue “which property type or asset classification crypto assets will be included in” constitutes another matter of debate regarding whether it is legally possible to impose attachment on crypto assets.  

The issue of classification of crypto assets

Whether crypto assets, for example Bitcoin or Ethereum, will be defined as currency, commodity, security or stock is one of the issues discussed and wondered since this economic instrument started to come to the fore. It is obvious that crypto assets will not be defined as money, for the reasons explained above, and in the direction supported by the majority opinion. Within this context, one of the important issues that needs to be clarified is how cryptocurrencies are defined by the states and according to which concept they will be subject to compulsory enforcement.  

In a recent decision rendered by the Istanbul Civil Enforcement Court, after the objection to the decision on the application of a blocking operation to a cryptocurrency account in consequence of an attachment notice issued by the Istanbul 14th Bailiff’s Office, the Court considers cryptocurrency as a commodity or movable and adjudges that an attachment imposed on cryptocurrency is lawful and in compliance with the Code.  

For the settlement of legal disputes, it may also be useful to closely monitor the decisions that will be rendered on this issue in the coming periods and to establish a legal basis for the issue “under which classification these assets will be considered and attachment proceedings will be carried out”.   

Explanations regarding imposition of attachment on crypto assets

The issue of whether it is, on the basis of article 89 of the Enforcement and Bankruptcy Code numbered 2004, legally possible to send attachment notices to the crypto asset institutions operating in our Country also arouses considerable curiosity. Due to the fact that crypto assets do not have a physical existence and that persons keep their crypto assets in their encrypted wallets in the virtual environment, the issue “on which money and account will an attachment be imposed” currently constitutes a matter of debate. It will only be possible for this debate to find a clarification if the States issue the relevant legal arrangements in their domestic laws and if the ownership on crypto assets are determined by precedent decisions and if the debates on their characteristics come to the conclusion.   

In the phase where attachment proceedings are initiated in respect of a finalized enforcement proceeding within the framework of article 89 of the Enforcement and Bankruptcy Code, it will be possible to impose attachments on the properties in the possession of the debtor and/or all the properties of the debtor, which have economic value and are in the possession of third parties. By this way, attachments can be imposed on the debtor’s movable and immovable properties convertible into cash, any of his rights and his receivables from third parties. The issue of making asset classification of crypto assets arises at the point of how the payment will be made to the bailiffs’ offices in the sense of attachability. In this case, the obligations, such as the obligation to inform truthfully, etc. may arise on the part of the intermediary company, and the intermediary company may, pursuant to article 89/4 of the Enforcement and Bankruptcy Code, be liable for not responding to the notice.   

In the possibility of considering crypto assets as money, the crypto asset may be deemed to be of foreign currency nature, and the provisions of attachment on movables may apply within the framework of article 88 of the Code.

In the possibility of considering crypto assets as commodity or security, it may be necessary to make an assessment on the matter such as the debtor’s (i.e., the debtor against whom enforcement proceedings are conducted) right to claim from the bank, and the attachment may be carried out by issuing a notice in accordance with article 89 of the Code. In an attachment to be carried out by this way, it will be necessary to introduce an appropriate solution for problems that will arise due to lack of physical existence of crypto assets.

The above possibilities are the alternatives that will be effective in cases where the crypto asset is stored in an intermediary institution. Apart from the above cases, for example in cases where the crypto asset is stored in a personal e-wallet, the issue of the determination and proof of the relation of the wallet with the person, the issue of how to resolve the problems that may arise due to the fact that these wallets are kept with a password that is only available to the user can be resolved with the advancement of technology and developments over time.  


Money is an economic value whose importance is growing day by day on persons and countries basis and which comes up with its alternatives with the advancement of technology. The transformations experienced by money and money substitutes find their reflections in both commercial aspects and legal aspects.

However, with the increase in the use of crypto assets which are defined as “intangible assets not qualified as fiat money, bank money, electronic money, payment instrument, security or other capital market instrument” pursuant to the Regulation where the definition of crypto assets is made, the question marks that emerge in this respect are shaped within the framework of the topics “in which value classification cryptocurrencies will be included”, “whether enforcement proceedings can be carried out in respect of cryptocurrencies” and “how to process ownership and attachment on crypto assets in case it is determined that enforcement proceedings can be carried out in respect of cryptocurrencies”.  

It will only be possible for all these crypto assets-related debates to come to the conclusion, with additional statements that will made further on by the Central Bank of the Republic of Turkey in this regard and with the necessary amendments to be made to the Enforcement and Bankruptcy Code.


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