Turkey's Crypto Overhaul: Can Oversight Coexist with Innovation?

Turkey's government has proposed granting its financial crimes authority, MASAK, expanded powers to freeze cryptocurrency accounts and blacklist wallets under anti-money laundering (AML) measures aimed at curbing illicit financial activity. The draft legislation, set to be introduced in the Grand National Assembly, aligns with Financial Action Task Force (FATF) guidelines and seeks to enhance oversight of digital assets, particularly in response to rising concerns over "rented accounts" used for fraud and illegal gambling Turkey to Give Authorities Power to Freeze Crypto Accounts in …^[1]. Under the proposal, MASAK would gain the authority to freeze both fiat and crypto accounts, impose transaction limits, and blacklist wallets linked to suspicious activity, extending its mandate beyond traditional banking systems to include cryptocurrency exchanges and payment platforms Turkey Eyes Tougher AML Rules with Crypto Freeze Powers^[2].

Key provisions of the draft law include mandatory transaction limits for stablecoin transfers, capping daily transactions at $3,000 and monthly transfers at $50,000. Exchanges complying with the FATF's "Travel Rule"-requiring full sender and recipient information-would receive double these limits Turkey’s Crypto Crackdown: Account Freezes Send Shockwaves^[3]. Additionally, users conducting transactions exceeding 15,000 Turkish lira ($360) must provide identifying details, while all transfers require a 20-character transaction note. First-time withdrawals from new accounts face a 72-hour delay, and most withdrawals are subject to a 48-hour hold to facilitate scrutiny Turkey, crypto crackdown: MASAK will be able to …^[4].

The regulatory push follows Turkey's June 2024 removal from FATF's "grey list," a move celebrated by Finance Minister Mehmet Şimşek as a milestone in strengthening financial oversight. The new measures aim to close loopholes exploited by criminal networks, particularly in sectors like real estate and banking, which have historically faced vulnerabilities to illicit financing Turkey Plans Law Allowing Watchdog to Freeze Crypto Accounts …^[5]. MASAK's expanded authority would also apply to decentralized finance (DeFi) platforms and custodians, which must now adhere to stricter compliance frameworks, including mandatory audits and enhanced customer verification systems Turkey to Let Masak Freeze Crypto Accounts in AML Push: Report^[6].

Industry reactions highlight both compliance challenges and potential market shifts. Major exchanges like Coinbase and Binance have already adjusted operations in response to earlier regulatory moves. Coinbase withdrew its pre-application to enter Turkey's crypto market, while Binance suspended its retail referral program to comply with local rules Turkey Plans Law Letting Masak Freeze Crypto Accounts^[7]. Smaller platforms may face greater operational burdens, with estimates suggesting small virtual asset service providers (VASPs) could require 3–6 months to adjust, compared to 4–8 weeks for larger operators Blockchain & Cryptocurrency Laws & Regulations 2025 | Türkiye^[8].

Despite the regulatory tightening, Turkey remains a global crypto adoption leader. Chainalysis' 2025 report ranks Turkey 14th worldwide in crypto activity, driven by the lira's steep depreciation since 2018. Bitcoin's value in Turkish lira has surged from 100,000 in 2020 to over 4.6 million in 2025, reflecting both the currency's decline and crypto's role as a hedge against economic instability Turkey Strengthens Crypto Oversight to Combat Fraud and Crime^[9]. However, the new rules could deter retail participation, with some experts warning that uncertainty over freeze thresholds might drive users to offshore or decentralized platforms Turkey Moves to Expand Watchdog Powers Over Crypto, Bank …^[10].

The government has not yet announced a tax regime for crypto assets, though a 0.03% transaction tax is under consideration to boost revenues without stifling growth. Finance Minister Şimşek emphasized that profits from crypto and stocks are not currently taxed, but transaction-based fees could emerge as a priority Crypto Regulation Gets Tough in Turkey With New Limits and …^[11]. The proposed legislation also mandates minimum capital reserves for exchanges ($4.1 million) and custodians ($13.7 million), further elevating entry barriers for new players FATF urges stronger global action to address Illicit Finance Risks …^[12].

With the draft law expected to face parliamentary debate soon, stakeholders await clarity on procedural safeguards, such as appeal mechanisms for frozen accounts and judicial oversight. While regulators frame the measures as necessary to protect financial integrity, critics argue they risk stifling innovation and pushing activity to less-regulated jurisdictions. The outcome will shape Turkey's position as a crypto hub and test its balance between regulatory rigor and market competitiveness.