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Turkey Looking To Establish Central Bitcoin Custodian Bank Following The Sudden Collapse Of Two Crypto Exchanges

source-logo  zycrypto.com 28 April 2021 12:18, UTC

The last week has been an interesting one in the Turkish crypto space. Two of the biggest exchanges in the country, Vebitcoin, and Thodex shut down following allegations of mismanagement and a change in the current financial landscape. Many Turkish nationals who had been turning to cryptocurrency after the Lira, Turkey’s native currency, saw a decline in value. 

In response to all of this, it seems the Turkish government is taking a hard stance. As per recent reports, the government is currently in the process of putting new regulations in place to monitor the industry.

More Regulations for the Turkish Crypto Space

According to recent reports, the government wants to create a central custodian bank to mitigate the risks of platforms closing down. After the collapse of both Vebitcoin and Thodex, investors are at a loss of millions of dollars and the government wants to prevent this from repeating itself.

The new report from Bloomberg cites information from a top official close to the situation. The government has already made a number of arrests regarding the situation such as Ilker Baş, an executive at Vebitcoin, as well as three other employees from the firm.

As for Thodex, its founder and CEO Faruk Fatih Özer is currently on the run and dozens of arrests have been made as police hunt for him. He has absconded with a reported $2 billion worth of investor funds.

Turkey is a big market for cryptocurrency, with 5 million active users and billions of dollars worth of transactions taking place on a weekly basis. With these sorts of numbers and two prominent exchanges shutting down in such a short time, the Turkish government is taking drastic actions to protect citizens and make sure the industry is regulated.

So far, the government has put a ban on the use of crypto for payments. Now, the Central Bank of the Republic of Turkey (CBRT) Governor Şahap Kavcıoğlu has clarified that while the ministry does not intend to forbid cryptocurrency, more regulatory frameworks will be coming in the next few weeks.

One of the most common concerns about cryptocurrency use around the world is the lack of regulation leading to crypto users losing their investments. Hopefully, the situation within Turkey will lead to a better crypto landscape for all.