Turkey's fourth biggest crypto exchange collapses

Turkey’s cryptocurrency investors were dealt another blow towards the end of a dismal week after another big exchange collapsed in as many days and its leader was reportedly detained.

Vebitcoin has halted procedures citing deteriorating financial conditions, and Demiroren News Agency said its leader Ilker Bas and three other employees have been detained. The Financial Crimes Investigation Board has blocked Vebitcoin’s accounts and opened a probe.

Vebitcoin is Turkey’s fourth biggest exchange with close to $60 million in daily volumes, according to CoinGecko.com which tracks data on price, volume and market value on crypto markets. Over fifty percent of this volume originated from Bitcoin, which dropped 19 per cent this week.

This week’s rout marks the worst period for Bitcoin because it tumbled amid a wider slump in risk assets at the end of February and analysts have warned of further losses. Even digital currencies that managed to eke out gains in the last couple of days, like Ether and Dogecoin, tumbled on Friday.

Vebitcoin’s collapse comes days after Thodex halted businesses and its own 27-year-old founder fled the united states. Thodex had about 390,000 users according to a legal professional for the victims and losses could possibly be as high as $2 billion, according to Turkey’s Haberturk newspaper.

Both exchanges were portion of the cryptocurrency boom which has drawn in legions of Turks seeking to protect their savings from rampant inflation and an unstable currency. Inflation hit 16.2 % in March, a lot more than three times the central bank’s target, and the lira has weakened more than 10 % against the dollar this season - its ninth consecutive year of losses.

The daily volume of trade in Turkish crypto markets was near $2bn for Friday, according to data from CoinGecko.com. The boom has drawn attention from regulators.

Turkey’s Central Bank has banned cryptocurrencies as a type of payment from April 30, and the united states has prohibited payment and electronic money institutions from mediating money transfers to cryptocurrency platforms.

Central Bank chief Sahap Kavcioglu said more regulations are in the pipeline in a televised interview on Friday. “We will work on regulations when it comes to cryptocurrency,” he said. “There are disturbing money outflows to outside of Turkey via cryptocurrencies.”