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Turkey’s cryptocurrency market in trouble as exchanges collapse

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Following a financial crisis, two crypto exchange platforms in Turkey, Thodex and Vebitcoin, stopped all operations, causing thousands of crypto users in the country to lose their investments. Thodex was the first to shut down late April, with Vebitcoin following a few days after.

In the midst of the pandemic, Istanbul-based cryptocurrency platform Thodex temporarily closed on April 25 to address an ‘abnormal fluctuation in the company accounts’.

Moreover, local news site Demiroren News Agency posted a photo of Thodex founder Faruk Fatih Ozer leaving Istanbul Airport wherein he reportedly fled to Albania with $2 billion worth of investor funds with him.

This caused an outrage among 390,000 active investors out of Thodex’ 400,000 user base. Following this event, a criminal complaint was filed against Ozer who disputed allegations, saying only 30,000 users have been affected by the situation. Moreover, he remarked that the reports of $2 billion losses are ‘unfounded’.

Turkish officials now have an international warrant for Ozer’s arrest. Currently, there are no developments on his whereabouts and a manhunt is underway.

On the other hand, another crypto trading platform, Vebitcoin suddenly ceased operations due to financial strain. The exchange site reportedly had $60 million in daily trading volumes prior to its collapse.

This caused Turkish officials to launch an investigation and even detain certain members of the staff. Additionally, Vebitcoin’s domestic bank accounts have also been blocked.

In a statement released on their website, Vebitcoin posted:

‘Due to the recent developments in the crypto money industry, our transactions have become much more intense than expected. We would like to state with regret that this situation has led us to a very difficult process in the financial field. We have decided to cease our activities in order to fulfill all regulations and claims. We will inform you as soon as possible.’

With two major crypto platforms down, Turkish investors are still waiting for updates. In April, President Recep Tayyip Erdogan called for swift regulation of the crypto market due to concerns around fraudulent activities such as pyramid schemes.

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