Turkey is waging war on cryptocurrencies
The move came after Turkey’s central bank last month banned the use of crypto assets for payments on the grounds that such transactions are risky.
The ban went into effect in Turkey on Friday, and was provided in response to allegations that such transactions could cause irreparable damage.
The presidential decree makes the crypto asset service providers responsible for not unlawfully using their assets, and the decree entered into force immediately with its publication in the Official Gazette of Turkey.
Last month, Turkish authorities launched fraud investigations on two cryptocurrency exchanges, Thodex and Vebitcoin.
Six suspects in connection with the Thodex investigation have been jailed pending trial, including the brothers of the platform’s CEO Faruk Fatih Ozer, whom Turkish authorities are seeking to search for after he traveled to Albania.
Interpol has issued an arrest warrant for the company’s CEO on behalf of Turkey.
The investigation into Thodex, which handled hundreds of millions of dollars in daily deals, initially led to the arrest of 83 people after customers complained they had no access to their money.
Cryptocurrencies are increasingly attracting Turks as a buffer against a falling lira and rising inflation, and the central bank ban has sparked a fear that even holding cryptocurrencies might later become illegal.
Before the start of the government campaign, estimates of the proposed daily circulation around the world for digital currencies indicated 2 billion dollars, and Turkey’s share is 16 percent of the total and ranks fourth.
Cryptocurrency prices have risen recently amid growing social acceptance, with companies like Tesla accepting Bitcoin payments.
The director general of the Bank for International Settlements (BIS) slammed Bitcoin earlier this year, arguing that it lacked any intrinsic value and consumed more electricity than Switzerland as a whole.
The Bank for International Settlements, which represents the interests of the Federal Reserve, the Bank of England and others, this month warned that oversight of digital currencies is still in its infancy, with many of the world’s leading economies still developing an approach to crypto assets.
The Turkish government appears to have many legitimate regulatory concerns about the dual risks of tokens used in money laundering and terrorist financing.