Turkey Moves to Expand Watchdog Powers Over Crypto, Bank Accounts

Core Viewpoint - Turkish lawmakers are considering legislation to enhance the authority of Masak, the financial crimes watchdog, allowing it to freeze bank and crypto accounts suspected of illegal activities [1][2]. Regulatory Framework - The proposed legislation would enable Masak to shut down accounts, limit transaction amounts, freeze mobile banking access, and blacklist crypto wallet addresses when criminal activity is suspected [2]. - The draft bill is part of the 11th Judicial Package and primarily targets "rented accounts" used for illegal betting and fraud [3]. Context and Implications - This legislative move follows Turkey's removal from the Financial Action Task Force's "grey list" in June 2024, which was celebrated by the Finance Minister [4]. - The initiative aims to address fraud related to gambling money, as individuals are reportedly renting their bank accounts to criminals [5]. Industry Reactions - Concerns have been raised about the implications of such powers, with some viewing it as a step towards increased state control over financial activities, which contradicts the principles of cryptocurrency [5]. - The uncertainty surrounding the thresholds for account freezes may drive users towards decentralized or offshore platforms, while institutional interest could grow if the framework is implemented transparently [6].