Turkey's Crypto Clampdown: Fighting Crime or Choking Innovation?

Turkey to Grant Authorities Power to Freeze Crypto Accounts in New AML Rules

Turkey is set to empower its financial crime authority, MASAK, to freeze and restrict access to cryptocurrency accounts under a sweeping anti-money laundering (AML) overhaul, aligning with Financial Action Task Force (FATF) standards Turkey to Give Authorities Power to Freeze Crypto Accounts in New AML Rules^[1]. The proposed measures, expected to be introduced via a parliamentary bill Turkey Plans to Let Watchdog Freeze Bank and Crypto Accounts^[3], aim to combat illicit finance, including fraud, illegal betting, and terrorism financing. Under the rules, crypto service providers must collect user identification for transactions exceeding 15,000 Turkish lira (approximately $360) and include a 20-character transaction note for every transfer Turkey to Give Authorities Power to Freeze Crypto Accounts in New AML Rules^[1]. Withdrawals will face delays—48 hours for standard transactions and 72 hours for first-time withdrawals from new accounts Crypto Regulation Gets Tough in Turkey With New Limits and Penalties^[4].

MASAK’s expanded powers will also allow the agency to close accounts suspected of illicit use, impose transaction limits, and blacklist cryptocurrency addresses tied to crime Turkey Strengthens Financial Oversight Over Banks, Crypto Wallets^[2]. The regulations target “rented” accounts, where individuals lease their accounts to criminals for illicit activities. Platforms failing to comply could face penalties, including fines, denial of licenses, or cancellation Turkey to Give Authorities Power to Freeze Crypto Accounts in New AML Rules^[1]. Treasury and Finance Minister Mehmet Şimşek emphasized the importance of compliance, noting that these measures are part of broader efforts to strengthen oversight of the crypto sector Turkey Plans to Let Watchdog Freeze Bank and Crypto Accounts^[3].

The reforms follow Turkey’s removal from FATF’s “grey list” in June 2024 after demonstrating progress in combating money laundering and terrorism financing Turkey Strengthens Financial Oversight Over Banks, Crypto Wallets^[2]. The new rules align with international standards, including the EU’s Markets in Crypto-Assets (MiCA) framework, and reflect the country’s rising position in global crypto markets. According to Chainalysis’ 2025 Crypto Adoption Report, Turkey ranks 14th globally in crypto adoption Turkey to Give Authorities Power to Freeze Crypto Accounts in New AML Rules^[1]. However, the stringent requirements have already prompted major exchanges to adjust their operations. Coinbase withdrew its pre-application to enter Turkey’s market, while Binance suspended its retail referral program to comply with local regulations Turkey to Give Authorities Power to Freeze Crypto Accounts in New AML Rules^[1].

The regulations also introduce minimum capital requirements for crypto firms. Exchanges must maintain $4.1 million in reserves, and custodians must hold $13.7 million Crypto Regulation Gets Tough in Turkey With New Limits and Penalties^[4]. These thresholds, combined with operational oversight from the Capital Markets Board (CMB), aim to ensure stability but could deter smaller players. Industry experts warn of potential downsides, such as the exit of large firms and reduced market activity, though the government argues the rules are necessary to protect the financial system from abuse Turkey to Give Authorities Power to Freeze Crypto Accounts in New AML Rules^[1].

To further bolster fiscal oversight, authorities are considering a 0.03% transaction tax on crypto trades, which could generate revenue without stifling market growth Crypto Regulation Gets Tough in Turkey With New Limits and Penalties^[4]. Şimşek clarified that taxation on crypto profits is not currently on the agenda, but transaction-based fees remain under review Crypto Regulation Gets Tough in Turkey With New Limits and Penalties^[4]. The regulatory shift underscores Turkey’s dual focus on fostering innovation while mitigating risks, balancing investor protection with the need to maintain a competitive crypto ecosystem.

The proposed measures are part of the 11th Judicial Package, expected to be submitted to parliament in the upcoming legislative year Turkey Strengthens Financial Oversight Over Banks, Crypto Wallets^[2]. While the bill is still in draft form, its passage would mark a significant step in Turkey’s alignment with global AML norms. As the country tightens its grip on crypto transactions, the long-term impact on market participants and user behavior will depend on how effectively the rules are implemented and whether they adapt to the sector’s evolving landscape.