Articles

Escrow mechanisms are key instruments used to address trust issues between parties, particularly in international trade and high-value transactions. Although Turkish law does not provide a specific and comprehensive regulation governing escrow systems, such arrangements are typically structured within the framework of the principle of freedom of contract (Article 26 of the Turkish Code of Obligations). Through escrow agreements, a third party (escrow agent) holds the funds until certain predefined conditions are fulfilled.

In recent years, the increasing use of escrow structures in crypto-asset transactions and cross-border commercial activities has given rise to new debates regarding their legal security. In Türkiye, the regulatory framework governing crypto-assets remains limited, and the absence of a clearly defined and supervised legal structure for escrow services expands the scope of potential risks.

In our view, as escrow mechanisms become more widespread, there is a growing need to establish a clearer and more regulated legal framework. Otherwise, a mechanism designed to enhance trust between parties may, in the absence of adequate safeguards, give rise to new disputes. Particularly in the context of financial technologies and international transactions, it appears inevitable that the legal framework will need to evolve in parallel with these developments.