Turkey to Let Masak Freeze Crypto Accounts in AML Push

The Turkish government is drafting legislation that would significantly expand the powers of its Financial Crimes Investigation Board, known as Masak. According to sources familiar with the matter cited by Bloomberg, the proposed changes would grant Masak explicit authority to freeze cryptocurrency accounts alongside traditional bank accounts. This represents a major extension of the agency’s existing anti-money laundering mandate, bringing digital assets under the same regulatory scrutiny as conventional financial instruments.

The move comes as Turkish authorities seek to address regulatory gaps in the cryptocurrency space, where the rapid growth of digital assets like BTC, ETH, XRP, and USDT has created new challenges for financial crime prevention. By extending Masak’s freezing powers to include crypto wallets and exchange accounts, Turkey aims to create a more comprehensive framework for combating illicit financial flows through digital channels.

The proposed legislation directly aligns Turkey with recommendations from the Financial Action Task Force, the intergovernmental body that sets global standards for combating money laundering and terrorist financing. FATF has consistently emphasized the need for countries to apply the same AML regulations to virtual assets as they do to traditional financial institutions. Turkey’s move demonstrates its commitment to meeting these international standards and addressing potential vulnerabilities in its financial system.

This alignment with FATF guidelines is particularly significant given Turkey’s strategic position bridging Europe and Asia. The country has been working to strengthen its anti-money laundering framework following increased scrutiny from international financial institutions. By bringing crypto regulation in line with FATF recommendations, Turkey aims to demonstrate its commitment to global financial security standards while addressing domestic concerns about crypto-related illicit activity.

The expansion of Masak’s authority represents a watershed moment for cryptocurrency regulation in Turkey, which has emerged as a significant market for digital assets. The ability to freeze crypto accounts provides authorities with a powerful tool to disrupt money laundering operations that might utilize cryptocurrencies like BTC, ETH, or stablecoins such as USDT to move funds across borders or conceal illicit activities.

This regulatory development reflects growing global concerns about the potential misuse of digital assets for financial crime. By granting Masak the same powers over crypto accounts that it already possesses for traditional bank accounts, Turkey is creating a more unified approach to financial oversight. The move signals that Turkish regulators view cryptocurrency as an integral part of the financial system that requires equivalent AML safeguards and enforcement mechanisms.

The legislation, when implemented, will establish clearer compliance requirements for cryptocurrency exchanges and service providers operating in Turkey. Market participants will need to ensure their AML procedures meet the enhanced regulatory expectations, potentially leading to increased operational costs but also greater legitimacy for the sector. This regulatory clarity could ultimately strengthen Turkey’s position in the global digital asset ecosystem while addressing persistent concerns about financial crime.