Second Exchange Collapses on the Aftermath of Crypto Ban in Turkey

• The Turkish government’s move to ban crypto transactions has brought chaos and exit scams.
• Two major exchanges have collapsed, and hundreds of thousands have lost their investments.
• More crypto regulations are going to be introduced soon, potentially banning ownership.

The decision of Turkey’s Central Bank to ban the use of all cryptocurrencies for transactions and purchases of goods and services in the country has wreaked havoc in the field, actually causing people to lose their money - the very thing that the move was purported to protect the people from. The first to go was Thodex, with its founder Faruk Fatih Ozer believed to have fled to Albania, taking $2 billion belonging to 391,000 investors with him. And now, we have the news of Vebitcoin halting operations after its CEO has been reportedly detained.

Vebitcoin was Turkey’s fourth-biggest crypto exchange platform, having a daily trading volume of about $60 million. Following the announcement about the ban of all crypto-exchanges, Vebitcoin users rushed to withdraw their investments, something that caused the service trouble, considering the increased traffic and the numerous transactions they had to check, confirm, and approve. Possibly, this was perceived as an attempt to exit scam by the country's authorities, so they went on to arrest Vebitcoin’s CEO and prevent a second fleeing incident.

Thodex had posted something similar on Twitter before they eventually suspended trading and apparently exit scammed. Responding to the rumors, the platform posted another message claiming that Ozer was indeed abroad - but for meetings with foreign investors. Allegedly, he would return to Turkey in a few days and cooperate with the judicial authorities. This hasn’t happened yet, Turkey’s secret agents are on the hunt, and yesterday, the police raided eight different locations across the country, arresting 62 people in the process.

In the meantime, chief of the Turkish Central Bank Sahap Kavcioglu stated during a TV interview yesterday that all of these crypto-exchanges were actually open taps through which money flowed outside the country. Moreover, the official said that additional regulations would be introduced soon, so the situation is to become even stricter, going beyond banning transactions. Possibly, we may see a total ban on the ownership of cryptocurrencies in Turkey.