Turkey Eyes Granting MASAK Power to Freeze Crypto and Bank Accounts in New AML Push

Summary

Turkey is preparing new legislation that would empower its financial⁵ crime authority, MASAK, to freeze or restrict access to both cryptocurrency accounts and traditional bank accounts suspected of illicit activity. The move is part of a broader enforcement drive under anti-money laundering (AML) and Financial Action Task Force (FATF) compliance goals.

What’s Being Proposed

• The proposed bill would expand MASAK’s mandate to allow it to freeze or close accounts in banks, payment systems, electronic money institutions, and crypto exchanges when accounts are suspected of criminal use.
• MASAK would also gain powers to blacklist crypto wallets, impose transaction limits, and restrict account access in order to curb money laundering and financial crime.
• The legislation is expected to be introduced in the Grand National Assembly (Turkey’s parliament) as part of upcoming judicial package reforms.
• The measures align with FATF’s standards and recommendations, aiming to close gaps in oversight over “rented accounts” (accounts used by criminals via others) and invisible flows.

Context & Recent Developments

• Crypto trading in Turkey remains legal. However, in recent months, authorities have already tightened⁶ rules on exchanges, including requirements for transaction tracing, customer identification, and limits on stablecoin transfers.
• Turkey has taken steps to block access to unlicensed digital asset platforms, including decentralized exchanges like PancakeSwap, via its Capital Markets Board (CMB).
• The proposed changes are seen as part of Turkey’s efforts to align with global AML norms, particularly since its removal from the FATF “grey list” in mid-2024.

Potential Impacts & Risks

Pros / Regulatory Strengthening

• The expanded powers would give authorities stronger tools against illegal finance, fraud, and money laundering via crypto.
• It may increase confidence among traditional financial institutions and international partners that Turkey is serious about AML compliance.

Concerns / Risks

• The sweeping power to freeze both bank and crypto accounts raises due process, privacy, and overreach risks if abuse or mistaken action occurs.
• Innovation & adoption: stricter rules may deter crypto startups or push activity underground or offshore.
• Market fragmentation: exchanges may relocate or limit services in Turkey in response to higher compliance burdens.
• Implementation challenges: enforcing freezes on crypto wallets requires rigorous infrastructure, proof, and coordination with exchanges and custodians.

What to Watch

• Formal drafting and passage of the legislation, and whether amendments or safeguards are introduced.
• How the government defines thresholds for suspicion, evidence required⁶ for freezes, and mechanisms for appeal or reversal.
• Reaction from crypto exchanges operating in Turkey: whether they push back, adjust policies, or exit.
• Whether other jurisdictions adopt similar “freeze authority” models over digital assets.
• How enforcement unfolds in practice—how often freezes are used, what criteria are applied, and impact on legitimate users.

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