There has been a sheer crypto euphoria in the country in recent years.
(Photo: dpa)
Istanbul In Turkey, Coinzo, the third platform for trading crypto currencies, has to close within a few months. Late on Monday evening (local time), the company announced that it would stop all activities. Coinzo was one of the five largest platforms in the country and had a turnover of more than 500 million Lira per day
“We have decided to discontinue our service for digital assets (crypto money platform),” says the company announcement. “All assets in Turkish lira and crypto money of our users are safe”, it is further assured.
It was only in April that the founder of the Turkish crypto platform Vebitcoin fled with digital coins worth hundreds of millions of US dollars. Many retail investors have not seen their savings since then. The founder of Thodex, who claims to be the first licensed crypto platform in Turkey, has sold up to two billion US dollars abroad. The public prosecutor’s office is investigating.
This is not yet the case with Coinzo. Nevertheless, the events in the country throw light on the largely unregulated industry. The Coinzo website will remain online for another six months. This would give users the opportunity to withdraw their funds. This should happen within seven days if you follow the instructions described.
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The value of a bitcoin has multiplied in recent years. A year and a half ago, a Bitcoin cost the equivalent of around 7,000 US dollars. Twelve months later, the peak was over $ 60,000. The value of a crypto currency is now the equivalent of around 57,000 US dollars.
Turkey: top in crypto trading
Online trading in cryptocurrencies is popular in Turkey. According to a survey by Statista, one in five Turkish Internet users owns or even trades in crypto currencies. That is a worldwide record. In Spain it was only ten percent of the respondents, in the USA five percent, in Germany four percent.
One reason for the cryptomania in the country is the overheated Turkish economy, from which low-wage earners in particular suffer. The lira has lost massively in value and unemployment is high. Last year inflation was 19.58 percent. In view of this high rate of inflation and the loss of the lira, many people want to invest their savings wisely. They often tried their luck with Bitcoin and other cryptocurrency.
In Turkey, this has resulted in sheer crypto euphoria in recent years, in which newspapers displayed the Bitcoin rate alongside the rate of the dollar and gold and even restaurants and car dealers accepted payment with digital coins. Up to two billion US dollars were traded in the country on platforms such as Coinzo, Vebitcoin or Thodex – every day. That’s $ 9,000 per person in the country, with a GDP per capita of just under $ 10,000.
The incidents surrounding the recently closed Turkish crypto platforms show how fragile investments in crypto currencies are. The fact that an emerging country like Turkey is hit brings another truth to light: This primarily affects investors for whom investments in Bitcoin and Co. are not play money, but sometimes the last way to accumulate wealth.
The government wants to regulate the sector more
A study in 154 countries came to the result that only twelve countries trade in insignificant amounts of cryptocurrencies. In most of the countries, Bitcoin and Co. already play a bigger role – including in many emerging countries.
The problem with this is obvious: People in emerging countries, who often do not have sufficient financial education, do not invest excess money in crypto currencies, but rather their hard savings, the value of which would otherwise slowly be consumed by inflation and currency collapse.
That should be over in Turkey for the time being. In mid-April, the Turkish Central Bank issued a decree that completely banned cryptocurrencies as a means of payment in the country. President Erdogan’s government has already announced that it intends to regulate the sector more closely.
More: Bitcoin and Co. are not for savers