The Turkish government is reportedly preparing a law to grant Masak, a watchdog for financial crimes. This is the authority to freeze cryptocurrency accounts as part of a broader effort to combat money laundry and financial crime.
Citing those familiar with the issue, the proposed changes expand Masak’s Money Laundering (AML) mission, allowing them to freeze both cryptocurrency and traditional bank accounts, according to a Bloomberg report.
The measure is said to be consistent with recommendations from the Financial Conduct Task Force (FATF). It is an intergovernmental agency that sets global standards for the fight against money laundering and terrorist financing.
According to Bloomberg, the bill will be introduced in the Greater Diet, but no scheduled numbers are provided.
If you pass, Masak is authorized to freeze or close accounts suspected of illegal use across payment systems, electronic money institutions, banks and cryptocurrency exchanges. You can also impose trade restrictions or blacklisted crypto wallets related to criminal activity.
The key focus of the law is to curb the rise of so-called “rental accounts.” Criminals are accounts that pay individuals for use in activities such as illegal gambling and financial fraud.
Cryptocurrency trading and investment remained legal in Turkey, and while profits are not yet taxable as of October, the government is moving to step up surveillance.
As reported by Cointelegraph, the Treasury has prepared new rules that require crypto exchanges to gather detailed information about the source and purpose of transactions, and has introduced restrictions on Stablecoin transfers.
In July, the Capital Markets Committee (CMB), one of Turkey’s leading financial regulators, announced that it had blocked access to several platforms that offer “fraudulent” digital asset services, including Pancakeswap, a popular decentralized exchange.
Related: Despite domestic bans in some countries, crypto payments overseas may be legal
Turkish crypto adoption is on the rise
The adoption of cryptocurrency in Turkey has steadily risen, supported by the growth of centralized retail platforms and the increasing presence of crypto services at domestic facilities, according to the latest Chain Melting Global Crypto Adoption Index released in September.
However, one of the biggest drivers of adoption is the rapid depreciation of the Turkish lira, which has been steadily decreasing since 2018 amidst a long-term financial and economic crisis marked by high inflation, rising borrowing costs and defaulting loans.
As Lira’s value was eroded, many citizens transformed into dollar-covered Stablecoins and Bitcoins (BTC) as valuable alternatives.
To explain the scale of the lira’s decline, in 2020, one Bitcoin was worth around 100,000 Turkish lira. Today, that figure is above 4.6 million lira, reflecting both the rise in Bitcoin prices and the sudden depreciation of the lira.
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