Turkey Will Regulate BTC Exchanges After Recent Developments

Turkey will regulate BTC Exchanges after the fiascos with Thodex and Vebitcoin exchanges that shut down with the customers’ funds still inside as we reported in our latest cryptocurrency news today.

The government is now cracking down on exchanges and the new regulations for exchanges could come at the end of May. The Turkish government plans to create a central bank of crypto custody after two prominent exchanges locked the customers out a week ago. As per the report, authorities could also require exchanges to keep a certain amount of cash on hand and to introduce credential requirements for the exchange executives. The moves are now aimed at limiting the risks to Turkish cryptocurrency investors when exchanges are not able to meet their obligations.

Last week as we saw, crypto exchange Thodex stopped trading and prevented all customers from making withdrawals.
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Many suspected fraud but the CEO Fatih Faruk Ozer claimed that it was due to cyberattacks. The government is not so sure about it as it detained company staff, seized computers, and froze bank accounts while setting in motion the CEO’s extradition from Albania where he had traveled when the exchange went dark.

Shortly after, rival exchange Vebitcoin stopped trading and locked the users out, claiming that there were intense transactions that put the company in a financially difficult position. The government’s financial crimes watchdog MASAK froze its bank accounts and started a new investigation. This all came during a volatile time for crypto in the country where BTC trading is popular. Turkey’s central bank banned the use of crypto payment processors and this move made it harder for foreign exchanges like Binance to operate because they weren’t able to use local payment services and deposit or withdraw Turkish lira.

They are able to partner with Turkish banks which are not subject to the ban and for this reason, local exchanges with current relationships with Turkish banks were not affected. The customers can continue using bank transfers rather than simply relying on third-party payment processors. Thodex and vebitcoin’s disappearing could bring even more scrutiny to Turkish exchanges and force the government to put forth new rules.

Turkey will regulate the crypto space but this will leave a small dent in the crypto market because the 2020 consumer survey found that 16% of Turks user or owned BTC which is more than double the percentage of Americans that use crypto.