Turkey-based Vebitcoin exchange has come under fire after it ceased its business operations amid a polarized crypto market terrain in the country. As reported by France 24, the Turkish authorities have arrested the Chief Executive Officer of the Vebitcoin trading platform, the second in a week after the Thodex exchange with a brawl with the authorities.
The harsh stance of the Turkish government to ban digital currency transactions in the country is coincidentally preceding an unprecedented strain on exchanges locking users’ funds per causes yet to be deciphered by the authorities. Thodex initially locked out about 400,000 customers, citing an ongoing sale transaction, with over $2 billion of investors’ money at stake. A manhunt is underway for Thodex CEO, Faruk Fatih Özer who has reportedly fled the country to Albania.
On the part of Vebitcoin, the exchange noted it had to halt its operations due to recent developments in the digital currency ecosystem. A move that signaled to authorities as an exit scam, fueling the ongoing investigation.
“Due to the recent developments in the crypto money industry, our transactions have become much more intense than expected,” the exchange said based on a translated version of an update on its website “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.”
Besides the Vebitcoin CEO detention, three others have been arrested in connection to the fraud probe. The officials per the report have also frozen the exchange’s account.
Turkey’s Tight Grip May Not be the Answer
Amid the tumbling value of the Turkish Lira, citizens have generally turned to crypto for solace, increasing the transaction volume from the country over 10 fold from November 2020 to March 2021 per France 24. In light of this reality, industry stakeholders have frowned at the tight grip stance the government wants to wield.
Stakeholders are advocating for a regulation system where crypto gains will be taxed as present in other nations, rather than an outright ban.
“Because cryptocurrency is currently unregulated (in Turkey), it could be more vulnerable to abuse and illicit activity,” Chainalysis’s government affairs chief Jesse Spiro told AFP “In general, regulations help build trust in this new asset class. On the other hand, the instability of the lira could make cryptocurrency more attractive.”