BTCTurk, a Turkish Bitcoin exchange which launched in July 2013, has finally terminated its operations in Turkey after local banks closed the main accounts of the company without prior notice. Such abrupt termination of services from banks and major financial institutions was seen last in Australia, when the country’s leading banks, including the multi-billion dollar banking group Commonwealth Bank, closed the bank accounts and financial services of Bitcoin startups in the region.
Tough choice for BTCTurk team
In contempt of their connections with the banks the company has collaborated with since 2013, local banks and financial institutions denied to provide any financial assistance or support to BTCTurk, which forced the Bitcoin exchange to terminate its operations permanently and return all user funds.
According to the Daily Sabah, one of the largest media companies in Turkey, BTCTurk team stated that it is virtually impossible for the company to create any bank accounts to support its operations, which left the firm no other choice but to shut down the exchange and pull out from the Turkish market.
“It appears that it is impossible for us to find a bank who agree to work with BTCTurk,” read the statement released by the company.
First PayPal, now Bitcoin exchange - what’s going on?
Paypal, arguably the most popular internet-based payment network was also asked to terminate its services in Turkey following the non-approval of its license by the Banking Regulation and Supervision Agency. The impractical and rigid financial regulations of the Turkish government forced a powerful financial institution such as Paypal to exit the local market.
At that time, the European Bitcoin startup Bitwala expressed their optimism towards the Turkish cryptocurrency market which has lost one of its strongest competitors. However, BTCTurk’s termination of services has proven that the Turkish financial market isn’t necessarily friendly towards digital currency-based startups, which is hindering the operations of the remaining Bitcoin startups in the region.
While it may be beneficial for startups like Bitwala who are based outside of Turkey, cryptocurrency and fintech startups who maintain their operations with Turkish bank accounts could very possibly face serious conflicts regarding their financial support in the near future.
Ultimately, the exit of BTCTurk puts any fintech or cryptocurrency-related startups in Turkey in danger of losing their financial connections which are vital to their core operations.