Turkish prosecutors on Friday ordered the seizure of assets of a gold trader testifying in a New York trial against a Turkish banker accused of violating US sanctions against Iran, state media reported.

The Istanbul public prosecutor said the assets of Reza Zarrab and his family would be confiscated as part of a probe, Anadolu news agency said.

The Turkish-Iranian citizen is accused of "espionage" for the benefit of a foreign state, according to the prosecutor's office, the agency reported.

Hurriyet daily said the order affected Zarrab and 22 others, including his daughter with Turkish pop star Ebru Gundes.

The trader on Thursday implied in testimony that President Recep Tayyip Erdogan knew how he and defendant Mehmet Hakan Atilla, deputy chief executive of Turkish lender Halkbank, dodged sanctions.

He told the court he was informed that in 2012, then prime minister Erdogan and then treasury minister Ali Babacan had given "instructions" for two other Turkish public banks, Vakif and Ziraat, to take part in the scheme.

Ankara has accused the trial of being a "conspiracy" and suggested the American judiciary is seeking to corner Turkey politically and economically.

Earlier on Friday, Turkish Prime Minister Binali Yildirim said the trial was "no longer legal" and had become "completely political".

In a speech two days after Zarrab first took the stand in a Manhattan court, Yildirim said: "God willing, he will turn back from this mistake."

Turkey has previously said the US case was a "plot" by members of the group led by US-based Islamic preacher Fethullah Gulen who Turkey accuses of launching last year's failed coup.

Zarrab was a key figure in a 2013 Turkish corruption scandal in which he allegedly bribed four ministers to facilitate sanctions-busting trade and other deals.

He was held for 70 days until prosecutors dropped all the charges.

Ankara also denounced the scandal at the time as a conspiracy by Gulen and his group.