Founder
March 4, 2026
15 min read
Law 7518 classifies crypto as intangible assets and places first sale and distribution under SPK; SAFTs must align with TBK contract law (freedom of contract, conditional obligation) and SPK capital markets rules (investment contract risk, KVHS, Art. 35/C form when using a platform).
Validity depends on token classification (utility vs security-like rights), written form and proof (HMK 200), and, when distributed via a licensed KVHS, mandatory written/remote KYC (Art. 35/C); non-compliance can result in nullity.
Investor protection: limitation-of-liability clauses toward customers are void; client assets are segregated; SAFT and crypto investments remain outside the SPK Investor Compensation Scheme.
Disputes: retail investors are likely to fall under Consumer Court (TKHK Art. 49); institutional SAFT keeps disputes in Commercial Court. Impossibility is split into faulty (TBK 112 → damages) and faultless (TBK 136 → restitution).
SAFT agreements in Turkey are legally possible, but only when contract design, token classification, and SPK–MASAK compliance are aligned from day one. Genesis Hukuk approaches SAFT as a Law + Tech architecture problem: legal drafting alone is not enough, and token engineering alone is not enough.
SAFT (Simple Agreement for Future Tokens) emerged as a post-ICO funding structure for blockchain ventures that needed capital before network launch. The model draws on the same logic as SAFE (Simple Agreement for Future Equity), developed in the US venture ecosystem (e.g. Y-Combinator) for early-stage equity; SAFT adapts that structure to future token delivery. SAFT logic separates the investment process into two phases: in the first, the SAFT contract itself is treated as a security offered to accredited or qualified investors, so that registration and prospectus burdens can be avoided under exemptions (e.g. US Regulation D). In the second, once the network is “functional,” delivered tokens are framed as utility tokens rather than securities, with the aim of enabling secondary trading without full securities regulation.
SAFT architecture gives investors economic upside through discount rate, valuation cap, and often Most Favored Nation (MFN) protection. Turkish law does not evaluate SAFT by label only; regulators and courts look at economic reality, rights attached to the token, distribution channel, and investor profile.
Understanding the financial mechanics is essential before applying legal doctrine. Unlike convertible notes, SAFT and SAFE are not debt: they carry no maturity, no interest, and no balance-sheet debt. Valuation is deferred to the token generation or pricing event.
Discount rate: A percentage applied to the future token price (retail or listing price). Investor benefit: tokens are allocated at a lower effective cost (e.g. 20% discount → cost basis 80% of listing price).
Valuation cap: Maximum project or token valuation used for conversion. Investor benefit: protects against dilution if the project is valued much higher at TGE; the investor receives tokens as if the cap applied.
MFN (Most Favored Nation): If later investors get better terms (e.g. higher discount), the earlier SAFT holder is entitled to the same. Investor benefit: keeps the first investor’s position aligned with later rounds.
Token economics (total supply, investor pool, vesting) should be sufficiently defined when the SAFT is signed; vague or missing terms undermine both validity and enforceability.
Turkish contract law rests on freedom of contract (TBK Art. 26). Parties may create unnamed or mixed structures provided they do not violate mandatory law, public order, or morality. SAFT fits the innominate (unnamed) and mixed contract category: it is not a nominal type such as sale or loan. It combines a future asset delivery obligation, allocation of development risk, and conditional performance tied to a technical milestone. It is not a loan (karz): the primary obligation is to deliver tokens, not to return the same sum of money. It is not a preliminary contract (TBK Art. 29): the SAFT is the main contract; performance is automatic upon TGE without a second contract. Under Turkish doctrine, the most accurate characterisation is a conditional obligation to transfer an intangible asset (TBK Art. 170): the condition is Token Generation Event (TGE) or network launch; until then the delivery obligation is not due.
The Turkish Capital Markets Law (SPK) includes investment contracts within the definition of capital markets instruments. Classification therefore turns on economic function, not the name “SAFT.” Risk rises when the token or the SAFT grants profit-sharing, governance tied to financial return, or debt-like repayment. It falls when the token is genuinely functional (network access, utility) and distribution is compliant. Token and SAFT documentation must be consistent (whitepaper, SAFT text, UI, onboarding); contradictions create legal and regulatory risk.
After the 2024 amendments, first sale and distribution are tightly regulated. Targeting Turkey (Turkish website, marketing, local onboarding) can trigger SPK and KVHS (crypto asset service provider) rules. If pre-sale or SAFT is conducted through an SPK-licensed KVHS (e.g. exchange or launchpad), the contract must comply with written form or SPK-approved remote identity verification (KYC) (Art. 35/C). Non-compliance can lead to nullity. Project teams must treat token sale flow and contract flow as one compliance map.
TBK Art. 12 establishes freedom of form: unless the law requires a specific form, contracts are valid without it. Crypto assets are defined as intangible assets under the 7518 Law; their transfer is not subject to a special formal requirement (e.g. notary) under general contract law. HMK Art. 200 (documentary proof threshold) still applies: above a certain value, claims must be proved by written evidence. For typical SAFT amounts, written form (wet or qualified electronic signature) is effectively mandatory for proof, even if not for validity. In practice, parties often use notarial certification of signatures to strengthen evidentiary value; the courts have held that absence of notarisation does not invalidate the contract when the law does not require it. Notary practice in Turkey: many notaries are reluctant or unable to certify English-only Web3 or SAFT documents, which can weaken proof in court. Bilingual drafting (Turkish and English) is practically mandatory where notarial certification is sought for evidentiary strength.
When the SAFT or pre-sale is via an SPK-licensed KVHS, Art. 35/C imposes a mandatory form: contracts must be concluded in writing or by remote means that allow verification of customer identity. Non-compliance can result in absolute nullity (butlan). SPK has also permitted AI-based remote identification where consistent with MASAK rules.
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The 7518 Law (in force from 2 July 2024) defines crypto assets as intangible assets created and stored electronically using DLT or similar technology, distributed over digital networks, and capable of representing value or rights. This anchors SAFT’s subject matter in positive law and deflects “illegal or impossible subject matter” arguments. The law then draws a dual track: crypto assets that confer rights specific to capital markets instruments (e.g. equity- or bond-like rights) fall under full SPK regulation; others may be distributed on platforms under SPK-set rules without applying the full securities regime, but still with disclosure and liability for misleading information.
First sale and distribution on platforms are under SPK’s exclusive authority (SPK Law Art. 35/B). SPK may require technical reports from TÜBİTAK or other bodies. Pre-sale or SAFT distribution to persons in Turkey through platforms (KVHS) must comply with SPK authorisation, TÜBİTAK scrutiny where applicable, and MASAK KYC/AML. Unauthorised activity can be treated as unauthorised capital markets activity; misuse of funds can trigger embezzlement (zimmet)-type liability.
III-35/B.1 and III-35/B.2 communiqués govern KVHS establishment, custody, and listing. Listing criteria, internal controls, minimum capital (e.g. 50 million TRY for certain KVHS), and tech requirements make CEX listing much harder. A token that is legally or regulatorily blocked from listing can make the investor’s position worthless and triggers questions of impossibility or contract adaptation (below).
Token classification drives offering regime, disclosures, onboarding, transferability, and enforcement risk. A practical test: Does the token primarily grant network utility or investment-type economic rights? Documentation must be consistent across whitepaper, SAFT, UI, and technical implementation. Regulators and courts look at substance; a “utility” narrative with “investment return” language creates vulnerability.
MASAK rules, travel rule data, and wallet-level controls can make SAFT performance impossible even when the smart contract works. The travel rule has been strictly enforced for KVHS since early 2025: if an investor’s self-hosted wallet fails MASAK-mandated KVHS screening (e.g. missing or insufficient originator/beneficiary information), the token distribution may be blocked at the platform layer, so the smart contract never executes, and the issuer faces a delivery default and a legal dispute despite a technically “ready” contract. Legal design should include robust KYC/KYB, transfer restrictions where needed, and fallback mechanics when AML blocks execution (e.g. “AML-out” clauses and clear allocation of responsibility).
Smart contracts execute obligations; they do not remove legal accountability. Immutability can clash with TBK Art. 138 (adaptation of contract in case of excessive difficulty). Court-ordered adaptation or termination cannot be “executed” on-chain; redress is off-chain (damages, restitution). Bugs or hacks that cause wrong or partial delivery leave the issuer exposed under TBK Art. 112 (non-performance / defective performance and damages).
Failure to launch, regulatory bars, or technical failure can make token delivery impossible. Turkish law distinguishes:
Fault-based impossibility (TBK Art. 112): The issuer’s fault (e.g. misuse of funds, failure to build the network, rug pull). The obligation does not simply disappear; it transforms into an obligation to compensate positive interest (what the investor would have had if the contract had been performed). The investor can claim damages on that basis.
Faultless impossibility (TBK Art. 136): Force majeure (e.g. SPK ban, unforeseeable regulatory change, catastrophic hack). The obligation is discharged; the issuer must return what was received under unjust enrichment (TBK Art. 77 et seq.).
Excessive difficulty (TBK Art. 138): Performance is not impossible but has become excessively onerous (e.g. macro crisis, collapse of token economics). The court may adapt the contract or, if adaptation is not possible, allow termination. On-chain code cannot be “adapted” by the court; relief is off-chain.
Summary: Fault-based impossibility (TBK Art. 112; triggers: misuse of funds, technical failure, rug pull) → investor may claim positive damages (expectation interest). Faultless impossibility (TBK Art. 136; triggers: SPK ban, force majeure) → restitution of principal (unjust enrichment). Excessive difficulty (TBK Art. 138; triggers: macro crisis, token economy collapse) → adaptation or termination (off-chain).
The 7518 Law strengthens investor protection in two ways. First, clauses that exclude or limit liability of KVHS or issuers toward customers (including SAFT investors) for non-performance or defective performance are void. Broad disclaimers in whitepapers or SAFT annexes cannot override this. Second, asset segregation is mandated: client funds and crypto held by the KVHS are separate from the KVHS’s own estate; they are not available for the KVHS’s creditors and are protected in insolvency. Misuse of client assets can be treated as embezzlement (zimmet) with serious penalties.
At the same time, the law excludes crypto assets and related investment contracts (including SAFT) from the Investor Compensation Scheme under SPK Art. 82. So even when operating through a licensed KVHS, SAFT investors have no statutory compensation fund in the event of platform or issuer failure. Recovery depends on contract, tort, and enforcement (TBK, execution law, interim measures). This “regulation paradox” is widely criticised in doctrine: a regulated market without compensation coverage.
Investors expect discounted access to future tokens and enforceable delivery rights. Sophisticated investors also expect clarity on dilution protection (valuation cap, MFN), information rights, and downside (Dissolution Event, refund triggers).
Disputes typically arise from: delayed or absent network launch without clear milestones; listing assumptions shattered by regulatory barriers; token delivery failure despite collected funds; or mismatch between legal documents and technical or commercial behaviour.
Remedies depend on fault and impossibility (see the summary above). In practice, parties rely on: specific performance (where still feasible), rescission/termination and restitution, damages for non-performance or defective performance, and interim measures (HMK) to preserve assets (e.g. freeze of funds or tokens) before judgment. SPK rules specify that attachment and interim measures over client cash and crypto are to be executed through the KVHS, which makes enforcement more predictable when tokens or funds are held there. Evidence (governance logs, milestones, investor communications) is decisive for fault and quantum.
When a SAFT dispute reaches the Turkish courts, the first procedural issue is which court has jurisdiction. The 7518 Law leaves this to general rules and case law. The Istanbul 21st Commercial Court (Case 2019/915, Decision 2020/278, 2 July 2020), upheld by the Regional Court, held that a retail investor who had paid for crypto (XRP, DigiByte, Cardano) and did not receive it was acting as a consumer and that the service was a financial service under the Consumer Protection Law (TKHK Art. 49). The dispute was therefore consumer in nature; the Consumer Court had jurisdiction, not the Commercial Court. The court stressed that the amount or frequency of the transaction did not by itself make the investor a “merchant”; the purpose (personal savings, non-professional) was decisive.
Retail (personal savings, non-commercial): transaction = consumer / financial service → Consumer Court (TKHK). Implications: strong consumer protection, unfair term control, possible fee advantages.
Institutional (VC, fund, commercial portfolio): transaction = commercial → Commercial Court (TTK). Implications: equal footing, commercial default interest, stricter commercial rules.
For issuers, this means: if SAFT is offered to retail investors in Turkey, disputes may end up in Consumer Courts, where broad disclaimers and limitation clauses are more likely to be struck down as unfair terms. Limiting SAFT to institutional or qualified investors (e.g. VCs, funds, corporates) helps keep disputes in Commercial Courts and under more predictable commercial law.
SAFTs also trigger complex corporate tax and VAT considerations in Turkey upon token delivery and secondary disposal. These must be structured alongside the legal and technical architecture, not as an afterthought. This guide does not constitute tax advice; founders and investors should obtain case-specific advice from qualified tax and legal advisers before committing to a SAFT or token distribution design.
Using a generic SAFT without mapping to Turkish law (TBK, SPK, 7518, KVHS communiqués, MASAK) creates hidden risk. Contract language must match actual token design and distribution channel.
Utility claims without real network functionality undermine credibility and legal position. Utility should be measurable and testable.
Retail-facing SAFT increases the chance of Consumer Court jurisdiction and stricter scrutiny of disclaimers. Structuring for institutional investors reduces this risk.
Contracts that describe upside but not downside (no clear Dissolution Event, refund triggers, regulatory gating, or AML-out) leave both sides exposed. Fallbacks should define what happens when launch, listing, or transfer assumptions fail.
Failing to use written form (and, where required, Art. 35/C-compliant execution when using a KVHS) can lead to nullity or unenforceability. Escrow, milestone-based release, and custody design (including bank/BDDK where applicable) should be decided upfront.
Genesis Hukuk structures SAFT transactions as an integrated legal–technical workflow, not as isolated document drafting.
Classify economic and governance rights; stress-test utility claims against technical reality; map SPK risk (investment contract vs utility under Art. 35/C(6)).
Align SAFT clauses with tokenomics and milestone logic; ensure consistency between legal and product documents; remove contradictions between fundraising language and legal positioning.
Map onboarding and transfer flows to MASAK (travel rule, self-hosted wallets, freeze/block); define data and wallet controls before launch; agree operational and contractual treatment of blocked or delayed transfers.
Define fault/impossibility paths and restitution; design dispute-resolution and evidence protocol; plan emergency governance for code or regulatory shocks.
This reflects Genesis Hukuk’s Law + Tech identity: we design legal reliability into the product stack before disputes begin.
Turkey’s crypto framework is no longer a grey zone. The 7518 Law and SPK/KVHS regime create a regulated but demanding environment. SAFT remains usable provided four dimensions are under control: legal structure (TBK characterisation, form, proof), token engineering (classification, utility vs security-like rights), compliance operations (SPK, TÜBİTAK, MASAK, TCMB payment restrictions), and evidence-ready governance (milestones, logs, communications). Projects that treat SAFT as full-stack architecture can raise capital and scale responsibly; those that treat it as a shortcut often face enforcement, performance failure, or loss of trust.
Book a Token Rights Audit with Genesis Hukuk to align your SAFT with the 2026 SPK and TBK framework, from token classification and form compliance to fallback design and dispute readiness.
Yes, provided the structure complies with Turkish law. SAFT can be legally structured under freedom of contract (TBK). Validity and enforceability depend on token rights, distribution model, form (including Art. 35/C when using a KVHS), and compliance with SPK and MASAK.
Yes. Regulators and courts look at economic reality, not the label. A token labelled “utility” can still be treated as an investment contract or capital markets instrument if the rights function like investment returns.
No. Smart contracts only execute; legal liability for non-performance or defective performance (TBK Art. 112) and for faultless impossibility (restitution under TBK Art. 136) still applies to issuers.
Mismatch between legal documents, token economics, regulatory obligations (SPK, MASAK, TCMB), and technical execution. A close second is competent court: retail SAFT can land in Consumer Court, where broad disclaimers are more likely to be struck down.
By aligning legal design, token classification, and distribution from the start. Concretely: early token classification; compliant onboarding and form (including 35/C where applicable); transparent milestone governance; robust fallback clauses (Dissolution Event, refund, regulatory gating, AML-out); and, where possible, limiting counterparties to institutional or qualified investors to keep disputes in Commercial Court.
This publication is for informational purposes only and does not constitute legal advice. Each SAFT structure requires case-specific legal and technical assessment.
