On Friday, reports came out that hundreds of thousands of people who were using the cryptocurrency exchange Thodex could not access their crypto accounts.
Almost $2 billion dollars of Turkish crypto has gone missing. An international search of the CEO of the exchange, Faruk Fatih Ozer, is ongoing, as news surfaced that he left the country for Albania. Currently, 62 people have been detained due to connections with the event. After news of this broke out, Bitcoin has been down 4%.
The financial stability of Turkey has been on the downturn in recent years.
The lira, Turkey’s currency, has been facing inflation and devaluation for a while now. Just a week ago, Turkey banned the use of cryptocurrencies to purchase items, citing “high risks” as the reason. So you can see news of possible fraud within one of the country’s biggest crypto exchanges that could send investors into pandemonium. With the lira fast declining, many people in Turkey turned towards crypto assets, as its recent hot streak seemed like a great hedge against devaluation.
But these events once again show us that regulation issues with crypto are a major hindrance to the possible success of the currency. Janet Yellen, US Secretary of Treasury, has previously voiced her concerns over cryptocurrencies being financed for illegal activities due to the anonymous nature of the transactions. Regulatory concerns are obviously another big thing, and with this Turkish event unfolding, investor confidence definitely has been shaken up a little bit.