Turkey: Crypto mania clobbered by exchange collapses and fallout

Exchanges Thodex and Vebitcoin both crumbled within days of each other, triggering a manhunt and arrests.

Cryptocurrency mania is getting a wake-up call in Turkey after two local exchanges crumbled in the space of a few days. The collapse of Thodex and Vebitcoin has triggered a manhunt for one of the exchange founders, led to dozens of arrests and inflicted untold losses on ordinary Turks. In the wake of a pledge last week by the central bank to tighten regulations surrounding cryptocurrencies, one Istanbul-based exchange said Monday it will establish a custodian firm to reassure investors. “This market looks like a bottomless pit and regulation is absolutely needed,” said Orkun Godek, the head of research at Istanbul-based Deniz Investment. “Risks may trigger new risks. People may close positions elsewhere to counter their crypto losses.”