30.11.2021

Cryptocurrency exchanges are closing in Turkey. What is the reason?

Turkish cryptocurrency exchange Vebitcoin has suddenly ceased operations due to unforeseen financial difficulties.

This is the second marketplace in the country to have closed to traders following the recent suspension of trading on the Thodex platform last Wednesday. At first, its representatives referred to problems with external investment, and then even mentioned cyberattacks. Let’s talk about what is happening in more detail.

The attitude of the Turkish authorities and financial regulators towards cryptocurrencies is not the best. As it became known the day before, the country’s central bank published a ban on the use of cryptocurrency as a means of payment for goods and services. That is, in fact, the very possession of coins is not prohibited, but it is forbidden to pay with them for anything in the country.

Note that such a decision provoked a massive interest of the country’s citizens in cryptocurrency. This is how the popularity graph of a request for Bitcoin in Turkish Google looks like.

At the same time, local cryptocurrency exchanges started having problems. At least they arose almost immediately after the bankers’ decision.

What’s happening with cryptocurrencies in Turkey?

Here is a quote from a publication on the Vebitcoin website, in which exchange representatives share the details of what is happening. The cue is from Decrypt.

Due to the recent interest in cryptocurrencies, our transactions have become much more intense than expected. We are sorry that this situation has put us in a difficult financial position.

That is, as can be judged from the words of the platform representatives, the growth of public interest in blockchain assets ended with a large number of cryptocurrency transfers. And it sounds strange, because trading exchanges earn exactly on commissions from clients’ orders. So, in fact, the activation of customers should have increased the platform’s income, and not vice versa.

Perhaps the platform representative had in mind the withdrawal of cryptocurrency to third-party wallets, but this version also does not fit. Still, popular exchanges charge a fee for sending funds from users, rather than paying for it themselves.

We checked the actual data: today, you need to pay the equivalent of $ 26 to withdraw Bitcoins from the Binance exchange.

At the same time, the withdrawal of ethers will cost approximately $ 12.

However, there are also more affordable options for sending funds. In particular, for the withdrawal of the native token of the Solana network, 0.01 SOL will be taken from the user, that is, approximately 45 cents at the current record rate of the cryptocurrency.

Vebitcoin is one of the smaller digital asset exchanges in the country. Last week, it had a daily trading volume of $ 60 million. By comparison, Thodex had a daily trading volume of $ 585.5 million on the last day of trading. One of the largest exchanges in the country called Paribu today recorded a trade turnover of $ 1 billion

BTC trades accounted for 56 percent of Vebitcoin’s daily volume, while XRP and XLM coins were in second and third places in popularity among exchange clients, with 10 and 6 percent of trading volumes, respectively. The amount of funds blocked on the exchange is still unknown.

Soon after the announcement, Turkish financial crime watchdog organization MASAK froze all bank accounts in the country related to Vebitcoin, and in addition launched an investigation into the company and its managers. Lawyer Mertkan Bayraktar, who represents seven people in the case against another exchange called Thodex, told reporters that the freezing of bank accounts is a necessary first step to protect the plaintiffs against the company.

At the same time, in the end, the government ruled out the possibility of a complete ban on cryptocurrencies in the country. At the weekend, it became known about the position of the Governor of the Central Bank of Turkey. Here is his line.

You cannot solve anything by simply banning cryptocurrency. And we are not going to do that.

As the representative of the country’s main bank clarified, full-fledged regulation of the niche will appear within two weeks. This means that the relationship of users with cryptocurrencies and various details of their taxation will be officially covered. And this once again proves the seriousness of the blockchain asset niche and its perception by the governments of different countries.

We believe that despite the problems with exchanges, the situation with cryptocurrencies in the country will get better. Obviously, the regulation and legal framework will attract the attention of more conservative investors, who were previously in no hurry to get involved with blockchain assets. This means that there will now be more reasons for the development of coins for the residents of Turkey.

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