According to February 2024’s latest inflation data, Turkey faces an inflation rate exceeding 67%, amid ongoing currency devaluation and a declining lira against the U.S. dollar. Recent findings suggest that in an effort to safeguard their wealth, Turks are increasingly turning to gold, with smuggling hitting unprecedented levels. Additionally, there is a growing interest among […]
Bitcoin News
75% Of All Binance Fiat Trading Volume Is In Turkish Lira
75% of all fiat volume in Binance, the largest cryptocurrency exchange by client count, is dominated by the Turkish Lira (TRY). At this rate, Kaiko, a blockchain analytics firm, confirms that the Turkish Lira is the most preferred currency, pointing to a shift in the global dynamics, especially regarding crypto adoption.
Turkish Lira Popular Fiat In Binance
As of September 14, 75% of all fiat volume was in Turkish Lira, ahead of the Euro and Brazilian Real (BRL). In the past three years, an unidentified cryptocurrency has gained popularity over traditional fiat currencies.
From 2021, TRY’s use was among the lowest, with the Euro and BRL being popular. However, the trend changed in 2022 as adoption spiked, pushing the currency to the top in 2023.
When writing on September 14, Binance remains the most popular cryptocurrency exchange, supporting over 380 coins. At the same time, the crypto exchange supports over ten fiat currencies, of which other coins, besides those mentioned above, include the Nigerian Naira, GBP, and the Australian Dollar (AUD).
Looking at statistics, USDT, TUSD, and FUSD pairs are among the most liquid. This observation has been confirmed by Kaiko data, which shows that fiat trading on Binance had contracted by over 95% from 2021 when prices of top crypto assets peaked. By November 2021, Bitcoin prices had soared to nearly ,000, lifting trading volumes in fiat and stablecoin pairs.
USDT And Stablecoins Still Reign Supreme
CoinMarketCap data reveals that the BTC/USDT pair is the most liquid, with the average daily trading volume exceeding 6 million when writing. On the other hand, the BTC/TUSD attracts over 6 million in trading volume.
This development highlights the level of liquidity of stablecoins and how they are entrenched in crypto trading. For example, the processing of fiat deposits or withdrawals on Binance can range from hours to days, depending on the method used.
Unlike fiat currencies, stablecoins are more fluid and can be transferred within seconds. For instance, USDT, the world’s largest stablecoin by market cap, is available in over five blockchains, with Ethereum and Tron emerging as the most popular minting platforms.
Following the delisting of USDC, BUSD volumes spiked. However, the New York Department of Financial Services (NYDFS) directive, barring Paxos–the then issuer–from minting new tokens, saw activity shrink as USDT cemented its position. TUSD and FUSD activity on Binance remains high, as data shows.
A recent survey by KuCoin, a crypto exchange, reveals that over 50% of people in Turkey own crypto. The Turkish government has also been experimenting with a central bank digital currency (CBC), the Digital Lira.
Turkish Crypto Exchange Boss Gets 11,196 Years in Prison
The CEO of collapsed Turkish crypto exchange Thodex has been sentenced to 11,196 years, 10 months, and 15 days in prison. He purportedly absconded with more than billion in cryptocurrency belonging to more than 400,000 customers. The court found his crypto trading platform to be a criminal organization.
Thodex Chief Sentenced to 11,196 Years in Prison
The CEO of collapsed Turkish cryptocurrency exchange Thodex, Faruk Fatih Özer, was reportedly sentenced to 11,196 years, 10 months and 15 days in prison on Thursday. AFP reported that prosecutors had requested a prison sentence of 40,562 years for the 29-year-old crypto exchange boss.
Özer was found guilty of various charges including fraud, leading a criminal organization, and money laundering. The court also found Thodex to be a criminal organization and that Özer acted with fraudulent intent from the beginning. In addition, Özer’s sister Serap and brother Guven were found guilty of the same charges.
The Thodex CEO refuted the finding that his intentions were criminal. He told the court he would “not have acted so amateurishly” if that was the case, according to state-run news outlet Anadolu Agency. The publication quoted him as saying:
I am smart enough to lead any institution on Earth … That is evident in this company I established at the age of 22.
Thodex, founded in 2017, was one of the largest crypto exchanges in Turkey before it abruptly collapsed in April 2021. The platform went offline and Özer disappeared, leaving over 400,000 customers unable to access their cryptocurrency holdings reportedly worth a total of billion.
Özer was arrested in Albania in August last year following an Interpol-issued red notice. After a lengthy legal process, he was extradited back to Turkey in June and found guilty of money laundering, fraud, and organized crime.
What are your thoughts on the crypto exchange CEO receiving a prison sentence of over 11,196 years? Let us know in the comments section below.
Turkish Court Sentences Founder of Defunct Crypto Exchange Thodex to More Than 7 Months in Prison
A Turkish court has sentenced Faruk Fatih Özer, the founder of the collapsed cryptocurrency exchange Thodex, to an effective seven months and 15 days in prison. During the trial, Özer denied being an executive of the crypto exchange when the platform allegedly failed to furnish the Tax Inspection Board with the documents requested.
Appointment of Trustee Reportedly Made Submission of Requested Documents Impossible
A court in Turkey has sentenced Faruk Fatih Özer, the founder of the defunct cryptocurrency exchange Thodex, to just over seven months in prison for failing to furnish the Tax Inspection Board with the documents it requested. However, according to a report in the Hurriyet Daily News, the Anatolian 17th Criminal Court of First Instance has since agreed to delay announcing the verdict as well as the implementation of the sentence.
As explained in the report, Özer, who was arrested in Albania in Aug. 2022, claimed that he was not a company executive when the alleged crime was committed. He also argued that the appointment of a trustee had made it impossible for him to submit the requested documents. Özer’s pleas nevertheless failed to sway prosecutors who were reportedly seeking a five-year jail sentence.
According to the report, the court initially ruled that the founder of Thodex should spend one year and six months behind bars. However, after considering the founder’s reported behavior before and during the trial, the Turkish court eventually ruled that Özer should only be in jail for seven months and 15 days.
Meanwhile, in addition to failing to submit tax documents, Özer is also accused of defrauding investors via his crypto platform. As reported by Bitcoin.com News, the Thodex founder was arrested in Albania several months after he fled from Turkey with billion which belonged to investors.
What are your thoughts on this story? Let us know what you think in the comments section below.
Turkish Lira Plunges to Record Low a Day After Central Bank’s Interest Rate Policy U-Turn
The Turkish lira fell to 25.74 per dollar just under a day after the central bank hiked interest rates for the first time since 2021. Although the rate hike decision was widely anticipated, the increase still fell short of the 21% that some analysts had predicted.
Turkish Lira Down 21% Since the Start of 2023
The exchange rate of the Turkish currency — the lira — versus the greenback fell to a record low of 25.74 per dollar a day after the central bank hiked interest rates by 650 basis points to 15% on June 22. The currency’s latest fall means the lira has now depreciated by just over 27% during the first half of 2023.
While the central bank was widely expected to abandon the recently re-elected President Tayyip Erdogan’s unconventional policies, a Reuters report said the hike had fallen short of analysts’ prediction of 21%. According to the report, some analysts believe a higher rate hike would have signaled the that Turkish government is about combating inflation.
As recently reported by Bitcoin.com News, the lira’s fall in recent years and the subsequent price increases have forced many Turks to seek refuge in digital assets such as the stablecoin tether. Others have turned to gold and the greenback which is now in short supply. While Tayyip is reported to have initially resisted calls to end his unorthodox monetary policies, the country’s deteriorating economic situation is thought to have forced the Turkish leader’s hand.
However, before increasing the interest rates to 15%, the central bank now led by the recently appointed governor Hafize Gaye Erkan, said the rate hikes would be gradual. The same sentiments were reportedly expressed by the new Turkish Finance Minister Mehmet Simsek.
The End of ‘Erdoğanomics’
Meanwhile, the Wall Street giant Goldman Sachs suggested in a recent note that the central bank may have already started the phased adjustment of rates with the 6.5% hike.
“The transition appears to be more gradual than we had thought,” the financial services giant reportedly said.
According to the Reuters report, Turkey, whose inflation rate has continued to soar, kept interest rates pegged at 8.5% since 2021. Although the policy was widely criticized, President repeatedly defended the decision and vowed to keep the rates low as long as he was in power. However, just a few weeks after winning the elections, President Tayyip approved the policy U-turn that one report characterized as “the end of Erdoğanomics.”
What are your thoughts on this story? Let us know what you think in the comments section below.
FTX Debtors Seek Dismissal of Turkish Entities in Chapter 11 Bankruptcy Proceedings
FTX debtors have filed a motion with the court requesting to dismiss its Turkish subsidiaries from the Chapter 11 bankruptcy proceedings. The defunct crypto exchange’s lawyers believe dismissing the entities “is in the best interests” of creditors, and FTX debtors do not believe Turkish authorities “or any liquidator” in the country will cooperate with officials from the United States.
FTX Lawyers Argue for Expelling Turkish Subsidiaries From Bankruptcy Proceedings
According to a recent bankruptcy court filing, FTX debtors have submitted a motion to remove the company’s Turkish entities from the Chapter 11 proceedings. The FTX-related units named in the court filing include FTX Turkey and SNG Investments. The debtors claim that FTX Turkey was a locally operated crypto exchange and SNG Investments was a wholly-owned Alameda Research subsidiary that acted as a market maker.
Shortly after FTX collapsed, lawyers say “Turkish authorities froze and seized substantially all the assets of the Turkish debtors.” FTX’s lawyers insist the two entities should be expelled from the bankruptcy proceedings, as they “believe it is in the best interests of the debtors and their stakeholders.” Furthermore, the debtors do not think the Turkish government will comply with the U.S. bankruptcy process.
“The debtors do not expect the Turkish authorities or any liquidator in Türkiye to seek recognition of their actions in the United States, and the debtors would intend to object to such recognition if reciprocity is not established,” the filing explains.
The news follows FTX lawyers asking the court’s permission to subpoena FTX co-founder Sam Bankman-Fried (SBF) and his inner circle. The filing notes that while SBF has publicly stated he’d like to “explain what happened” and “try to help customers,” he has “not responded to or complied” with requests. “As a result, a court-authorized subpoena is necessary,” the attorneys explained in the motion. In the latest filing, the debtors stress that dismissal of the Turkish debtors’ Chapter 11 cases “is warranted.”
Moreover, given that Turkish authorities froze the debtors’ assets, a Chapter 7 conversion “would not serve the best interests” of the debtors’ estates and creditors, the filing adds. The court document also details that the funds were seized by the Turkish government because the Turkish Financial Crimes Investigation Board (MASAK) was conducting an investigation into FTX’s business dealings. The lawyers conclude the bankruptcy court would not have any “legal or practical effect” in Turkey.
What are your thoughts on the recent motion by FTX debtors to dismiss their Turkish subsidiaries from Chapter 11 bankruptcy proceedings? Share your opinions in the comments below.
Turkish Lira Vs BTC: What’s Behind The Bitcoin Chart You Can’t Miss
Bitcoin price quoted in United States dollars has been suffering from a sharp and sudden downtrend after setting a new all-time high in November. But when quoted in Turkish lira, the top cryptocurrency kept on climbing in November and has never looked back.
The result? A shocking cryptocurrency price chart you simply have to see to believe. We’ll also explain the background behind the devastating downtrend in TRYUSD.
BTCTRY: Bitcoin Makes A Bullish Bet Against Struggling Currencies
All throughout the history of Bitcoin price action, after setting a higher high, the notoriously volatile cryptocurrency would blast off to a cycle climax. But the recent macro concerns around the Federal Reserve’s plans to raise rates put any bullish momentum on pause.
Related Reading | This Bitcoin Morning Star Could Brighten The Bullish Narrative In A Flash
Instead of new highs in BTCUSD, the top crypto asset by market cap has fallen by 38% or around ,000 per coin. However, crypto assets don’t only trade against the dollar, much like BTC can trade against altcoins like ETH.
Bitcoin trading against the lira looks a lot different than the dollar | Source: BTCTRY on TradingView.com
Bitcoin can be quoted in the euro, yen, or in the case of the chart above, the Turkish lira. On the BTCTRY trading pair, after the all-time high was breached in early November, the bullish trend has yet to take a breather – let alone the steep correction seen in USD terms.
Behind The Turkish Lira Plunge, An Omen For The Dollar?
The flight to the dollar caused by the mere mention of rate hikes has decimated assets. In Turkey, the opposite is happening. Under president Recep Tayyip Erdoğan, Turkey’s central bank has cut interest rates by a full percentage point five times since September, sending the nation’s currency into a free fall.
Related Reading | Bitcoin Falls Flat: Examining A Rare Bull Market Corrective Pattern
During this time frame, the lira has fallen 50% against the dollar. Inflation in the country has also increased by 21%. Central banks in Turkey have attempted to intervene several times without success, selling off the country’s reserve of USD.
The lira has been in free fall against USD | Source: TRYUSD on TradingView.com
In response to inflation concerns, Erdoğan has raised the minimum wage by 50%, which Marek Drimal at Société Générale claims “will fuel inflation pressures further, together with the cumulative impact of the lira’s weakness”.
Additional, unspecified measures are also promised. But will they work? The lira is an example of what happens when there are no more levers left to pull. The United States Federal Reserve has a lot more shock and awe left in its war chest, but even it is struggling to balance markets, inflation, and a currency meltdown.
Follow @TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice.
Featured image from iStockPhoto, Charts from TradingView.com
NewsBTC
Turkish Central Bank Considers Becoming Bitcoin Custodian
Turkey’s fiat currency, the Lira (TRY), is in serious trouble – especially against Bitcoin – with consumer price inflation reaching an alarming 16% in March of this year. In January of 2008, the Lira traded at near-parity with the US Dollar but is currently near its all time low of 8.5 TRY to the USD.
Perhaps in response to the surging demand for reliable hard money alternatives like Bitcoin, the Turkish central bank, the CBRT, banned cryptocurrency as a payment method for goods and services in mid-April of this year.
Think Bitcoin its expensive in USD? TRY again | Source: BTCTRY on TradingView.com
The Plan
The subsequent failure of two Turkish crypto exchanges, Thodex and Vebitcoin, was perhaps a fairly predictable consequence of the harsh and sweeping new restrictions. While the CBRT’s governor has denied any blanket ban of crypto, according to a report published on Bloomberg and attributed to a senior government official, the CBRT is now planning to aggressively regulate the Turkish crypto industry. Much of the proposed regulation appears designed to prevent further exchange failures.
Related Reading | Bitcoin Loses Important Lifeline That Got Bulls Blood Pumping
Specifically, the CBRT would reportedly create a new custodial bank, intended to hold the crypto funds of local crypto exchanges and possibly other crypto companies taking user deposits. Most likely, to avoid operational disruption, the proposed bank would maintain only the companys’ cold wallets while allowing them to operate their own hot wallets.
This plan would prevent any re-occurrence of the Thodex exit scam incident, in which the company’s founder fled the country with billion in user deposits… Unless a bad actor at the custodial bank enacts a similar crime. Or the bank gets hacked. Or the government shuts it all down.
The Flaws
It should be clear that the CBRT’s claim that the custodial bank will “eliminate counterparty risk” is inaccurate – the most it will achieve is to transfer counterparty risk from multiple private entities to a single public one. In effect, this custodial bank would take unto itself the responsibility of managing all crypto exchange deposits within the country. It can be hoped the CBRT will only employ trustworthy individuals and implement solid security measures.
Related Reading | Potential Island Reversal Leaves Bitcoin Bulls Stranded
The CBRT is also considering applying a capital threshold rule for exchanges, designed to ensure such companies are sufficiently well-capitalized. This measure would require a high degree of accounting transparency between crypto exchanges and the CBRT, in order to monitor all relevant crypto and fiat balances. The compliance costs of such regulation would likely drive up fees on Turkish exchanges but could help to prevent any repeat of the Vebitcoin collapse, which has been attributed to fraud.
The Consequences
If realized, this plan would represent the first time that a national central bank directly controls the crypto funds of its local industry. Whereas its now common practice around the world for exchanges to comply with banking-style regulations and report user information and balances, having the financial authority itself hold the private keys is a new level of centralized control. The possibility for an embarrassing failure exists, if the custodial bank were to fail or be breached. Given Turkey’s current monetary difficulties, the seizure of its citizens’ crypto funds is another potential risk. Turkish users would be well-advised to keep this maxim in mind: not your keys, not your bitcoin.
Featured image from Shutterstock, Charts from TradingView.com
Country in Chaos: Second Turkish Crypto Exchange Collapses Amid Accusations of Fraud
Vebitcoin crypto exchange based in the southwestern city of Mugla, Turkey, has gone offline. The company’s website home page refers to recent developments that have forced them to cease trading.
“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.“
Local media reports that CEO Ilker Bas, along with several other employees, were detained. At this stage, there is no information on user funds. As the second Turkish exchange collapse in as many days, crypto investors in the country are reeling from the double whammy.
Crypto Safety Now Firmly in The Spotlight
Vebitcoin was founded in August 2017 and provided a small number of crypto to Lira trading pairs. BTCTRY accounts for more than half of its volume and no crypto to crypto pairs are offered.
The latest 24-hour volume shows million traded, making it relatively small in market share. Following his arrest, Bas told police that the platform has 90,000 registered users.
Last week, the Thodex crypto exchange collapsed with authorities looking to trace its CEO Faruk Fatih Ozer. The platform denies any wrongdoing and issued a statement saying its website is down due to striking a deal with outside investors.
A search is currently underway for Ozer, who may have fled to Albania or Thailand. Thodex has 390,000 active users, and it’s believed Ozer may have taken billion of user funds.
Turkey was experiencing a crypto boom off the back of worsening economic conditions in the country. With inflation hitting 16% last month and the continued weakness of the Turkish lira, many had turned to crypto as a way to protect themselves.
But with the collapse of Vebitcoin and Thodex in quick succession, the reputation of cryptocurrency in the country has taken a hit. Orkun Godek, the Head of Research at Deniz Investment, said tighter regulation is needed following the collapses.
Turkish Central Bank Rules Out Ban
Turkey had already issued an order to ban cryptocurrencies for payment for goods and services. A statement from the central bank read:
“neither subject to any regulation and supervision mechanisms nor a central regulatory authority. Their market values can be excessively volatile.”
Following Vebitcoin’s collapse, many feared the central bank would take the opportunity to impose even harsher restrictions. Governor Şahap Kavacıoğlu told state television channel TRT that regulations are coming, but there will be no outright ban.
“You cannot fix anything by banning crypto and we do not intend to do this.”
Kavacıoğlu did not address what future regulations would mean. only that it would bring clarification on the legal definition of crypto and custodial requirements for institutions.
Crypto Takes Another “L” as Turkish Exchange Founder Runs With $2bn in User Funds
Faruk Fatih Ozer, the founder of the Turkish crypto exchange Thodex, is reportedly on the run with billions of dollars of users’ funds. Reports claim the exchange website shut down on Wednesday, with a message saying trading was suspended due to an “unspecified outside investment.”
Many Turks had turned to crypto as a lifeline following the Lira’s plunging valuation. In response, the central bank moved to ban Bitcoin and other cryptos in payment for goods and services. But Ozer’s disappearance has intensified calls for an even greater crackdown.
Crypto in The Spotlight After Founder Goes Missing
Turkish authorities are on the lookout for Ozer after he fled the country with a reported billion. Officials have released a photo of the suspect going through passport control at Istanbul airport. Media reports say he may have flown to either Albania or Thailand.
The Thodex crypto exchange was running forceful promotions, presumably to entice deposits in the run-up to Ozer’s disappearance. Local media talks about one such promotion in which the firm sold Dogecoin below market value. A condition of the promotion was that investors could not sell straight away.
Victims of the exit scam are filing complaints at their local prosecutors’ office. But given the unregulated nature of crypto exchanges in general, many fear their funds are lost.
Prosecutors have issued arrest warrants for 78 people. So far, 62 have been detained in an operation stretching eight Turkish provinces.
Thodex issued a statement saying adverse reports about them are untrue. They maintain that the website is down because banks and other partners had expressed an interest in investing in them.
Following the website shutting down mid-week, users took to Twitter to express concerns that their funds were inaccessible. Even at that early stage, some suspected they had been scammed.
Turkey Bans The Use of Cryptocurrency
Last week, Turkey’s central bank issued an order to ban the use of crypto in payment for goods and services. The action was a response to a rise in Turkish citizens turning to cryptocurrency to hedge against spiraling inflation and the effects of the Lira’s decline.
The bank said this was necessary as crypto presents a risk from lack of regulation and extreme volatility. The restrictions will come into effect at the end of this month.
“neither subject to any regulation and supervision mechanisms nor a central regulatory authority. Their market values can be excessively volatile.”
Many had panned the move citing government overreach. But Ozer’s disappearance will undoubtedly give Turkish President Recep Tayyip Erdoğan fuel to back up his mandate.
With that, attention is once again back on crypto exchanges. While the term, not your keys, not your coins is prevalent, victims only realize this when it’s too late.