Turkish officials are not releasing their grip on cryptocurrency restrictions. Following a ban on cryptocurrencies as a payment option for goods and services in mid-April, it appears the Turkish central bank (CBRT) is making moves to become a Bitcoin custodian.
Two Turkish exchanges (Thodex and Vebiton) recently shut down. In the case of Thodex, it is alleged that the CEO carted away with $2 billion belonging to customers. Both cases have been linked to fraud.
The CBRT is rising to the occasion to play big brother. It is now planning to aggressively regulate the Turkish crypto sector, according to a report published on Bloomberg, a move that it believes could prevent further exchange failures.
To this effect, the apex bank will reportedly create a new custodial bank that will hold the crypto funds of local exchanges. The proposed bank may hold only funds in a crypto company’s cold wallet to avoid operational disruption.
Although the sources familiar with the matter claim that the custodial bank will “eliminate counterparty risk,” in reality, the risk is being transferred from several private entities to a single public one. There is the possibility that things could go terribly wrong if the custodial bank is breached.