Major Turkish Exchange Shuts Down Following Banking Suspension

Bitcoin in Turkey has come under renewed pressure as longstanding Turkish exchange BTCTurk has its bank accounts shut down. 

Also read: Bitwala Steps Up to Replace PayPal with Bitcoin in Turkey

BTCTurk: Bitcoin Trading ‘Risky’

BTCTurk, which started trading in 2013, said it was currently trying to refund customer balances in the face of the unexpected withdrawal of banking relations.

“The closure of the company’s bank accounts is due to the perception that Bitcoin trading is risky and lacks accountability,” CTO Emre Kenci told local news publication Hürriyet.

The exchange released a statement August 19 following the move announcing it would restore funds to customers starting August 22, but that due to the blocking of bank accounts this would take longer than usual.

“Deposits and withdrawals in Turkish lira will restart shortly, but it seems impossible that we will find a bank willing to work with BTCTurk,” the statement reads, continuing:

It is unethical for our company to continue holding customer balances in the long term.

It added that there was no criminal investigation being carried about.

Turkey has been notable recently in increasing legislative pressure on non-traditional forms of payment. This extended most recently to PayPal, whose Turkish operation was terminated in May due to a discrepancies in its paperwork.

“…The refusal of the local regulatory agency license application we made and the need to apply to the relevant institutions in accordance with instructions to stop our activities in Turkey does not leave us any other choice [than to stop operations in Turkey],” a message on PayPal’s Turkish website currently still reads.

The situation does not appear to be changing anytime soon, with few hints of PayPal’s return to the Turkish market surfacing.

Turkish Authorities’ Stance ‘Not Changing’

The exit of PayPal initially gave hope to the idea that alternative transaction formats could establish a foothold in the country. However, the banking sector’s latest move indicates a generally hostile climate with all-round pressure being applied to protect traditional finance.

“Ending the activities of BTCTurk may push many Bitcoin users underground,” Kenci said, mentioning that cooperation with public authorities is an unavoidable part of any future operations. “Monitoring of transactions will be almost impossible in this case, and we therefore think there are opportunities for BTCTurk could continue.”

Nonetheless, Kenci conceded that pressure from above was an unavoidable issue which appeared to trump BTCTurk’s efforts to promote Bitcoin’s image as trustworthy.

“Despite taking broad measures to protect consumers and to guard against illegal transactions, the perception [of authorities] could not be changed,” he added.

What to you think about the situation regarding Bitcoin in Turkey? Let us know in the comments section below!

Images courtesy of bitcoinhaber.net, linkedin.com, haaretz.com

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