Introduction
Turkey is drafting sweeping legislation that would grant its financial intelligence unit Masak unprecedented authority to freeze bank and cryptocurrency accounts linked to suspected criminal activity. The proposed measures, coming just months after Turkey’s removal from the FATF grey list, would allow direct intervention across financial institutions and cryptocurrency platforms, marking a significant regulatory shift that experts warn could drive users toward decentralized alternatives while potentially increasing compliance costs for crypto exchanges.
Key Points
- Masak would gain direct authority to freeze accounts at banks, payment firms, and crypto exchanges without court orders
- The legislation specifically targets 'rented accounts' where individuals lease banking credentials for criminal activities like illegal betting
- Industry experts are divided, with some warning of increased compliance costs while others suggest institutional adoption might grow with transparent implementation
Expanded Powers for Financial Watchdog
The draft legislation would empower Masak, Turkey’s financial intelligence unit, to take direct action against accounts suspected of criminal use across banks, payment firms, and cryptocurrency exchanges. According to the Bloomberg report citing people familiar with the matter, Masak would gain the ability to shut down accounts at financial institutions and crypto services, cap transaction amounts, freeze mobile banking access, and add crypto wallet addresses to a blacklist when criminal activity is suspected.
The proposed framework represents a significant expansion of Masak’s current authority and is expected to be part of the 11th Judicial Package when parliament reconvenes. The legislation primarily targets “rented accounts” where individuals lease their banking credentials to criminals for illegal betting and fraud operations. Gokay Aktasin, head of market making at Turkey-based crypto exchange CoinTR, explained that “people are looking for a way out from economics problems,” which includes “renting their bank accounts to such people to get their business flow done.”
Post-FATF Compliance Push
The regulatory push comes after the Financial Action Task Force removed Turkey from its “grey list” in June 2024, a decision that Finance Minister Mehmet Simsek celebrated by tweeting “We did it.” This followed years of concerns over weak oversight that left sectors like banking and real estate vulnerable to illicit financing. The new legislation appears to be part of Turkey’s ongoing efforts to strengthen its anti-money laundering and counter-terrorism financing frameworks.
Aktasin from CoinTR noted that the aim may be specifically to curb fraud related to gambling money, emphasizing that “it’s much bigger than just a few internet casinos.” The timing suggests Turkey is seeking to consolidate its improved standing with international financial regulators while addressing domestic concerns about financial crime.
Industry Concerns and Potential Consequences
Industry experts have raised significant concerns about the proposed measures. Nic Puckrin, crypto analyst and co-founder of The Coin Bureau, told Decrypt that “this proposal is a move toward a Big Brother state, thinly veiled as compliance.” He added that “having such powers over bank accounts is questionable enough, but it’s even more antithetical to the entire idea of crypto, which values self-custody and censorship resistance.”
Lionel Iruk, senior advisor to Nav Markets and managing partner at Empire Legal, warned that “from a user perspective, the uncertainty around thresholds for freezes and lack of legal clarity could drive more activity to decentralized or offshore platforms.” This sentiment reflects broader concerns that the regulations could push Turkish crypto users toward less regulated alternatives, potentially undermining the government’s oversight objectives.
However, Iruk also noted a potential paradox: “Yet paradoxically, institutional interest might grow if the framework is implemented transparently and predictably.” This suggests that while individual users might flee to decentralized platforms, clearer regulations could attract larger institutional players who value regulatory certainty.
Broader Implications for Turkey's Crypto Future
The proposed regulations remain subject to revision throughout the legislative process and may be amended before final approval. Puckrin from The Coin Bureau cautioned that “it’s certainly not a good look for Turkey if it wants to be a major player in the global crypto arena,” indicating that the measures could damage Turkey’s reputation in the international cryptocurrency community.
Experts warned that the measures could increase compliance costs for crypto platforms operating in Turkey, potentially creating barriers for smaller exchanges while favoring larger, more established players. The balance between combating financial crime and maintaining an attractive environment for cryptocurrency innovation will be crucial for Turkey’s future position in the global digital asset market.
The legislation represents a critical test for Turkey’s approach to financial regulation, pitting the need for enhanced security measures against the fundamental principles of financial freedom and innovation that have driven cryptocurrency adoption worldwide. As the draft bill moves through the legislative process, its final form will signal whether Turkey can successfully navigate the complex landscape of modern financial oversight while preserving its potential as a crypto hub.
📎 Related coverage from: decrypt.co