Another Turkish Crypto Scam?

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A second Turkish Cryptocurrency Exchange has suddenly ceased operations this week, according to an article at BBC News. You may recall that earlier this week, the Turkish Crypto Exchange Thodex froze client accounts and their CEO reportedly left the country.

One report had Thodex's CEO, Faruk Fatih Özer, flying to Thailand while other reports said he flew to Albania. In case you missed it, here is my earlier article about Thodex.

Vebitcoin

Turkish Crypto Exchange Vebitcoin ceased operations yesterday and placed a message on their website. Vebitcoin's message reads "Due to the recent developments in the crypto industry, our transactions have become much more expensive than expected. We would like to state with regret that this situation has led us to a very difficult financial situation. We have decided to cease our activities in order to fulfill all regulations and claims. We will provide you with information as soon as possible." This is Vebitcoin's message as translated to English.

Vebitcoin's excuse sounds pretty lame and suspicious; Turkish authorities apparently feel the same. Turkey's Financial Crimes Investigation Board moved quickly to block activities in Vebitcoin's bank accounts after the company posted their message about ceasing operations. I expect Turkish authorities hope to prevent company funds from being transferred or withdrawn, however, I fear they are too late.

This week has been difficult for cryptocurrency investors, and tragic for Turkish cryptocurrency investors! I wonder if these two Turkish Crypto Exchange closures will affect Bitcoin, Dogecoin, Ethereum, and other more widely known cryptocurrencies' market prices in the short term. I feel very sad for the affected Turkish investors!

Remember This Lesson

Please be cautious about investing in cryptocurrencies. And remember the lesson I mentioned in my earlier article about Thodex's shutdown. The lesson, "Don't put all your eggs in one basket" must be remembered!

I personally wouldn't invest in cryptocurrencies, but if I did decide to invest in a cryptocurrency, I would invest very, very little of my overall portfolio.

Investors should almost always diversify as part of their asset allocation strategy. Diversification is known as the only "free lunch" when it comes to asset allocation and investing. The free lunch is because diversifying among different assets and asset classes will usually reduce portfolio risk and volatility.

Remember, spread your eggs around in multiple baskets!

Thanks for reading.

Mike Bishop

Editor, The FIRE Letter

Disclosure: I do not own any crypto currency, either directly or indirectly through a fund or ETF.

Disclaimer: All strategies including recommended trades published here are for educational and informational purposes only. They are not recommended for any specific individual, business, or other legal entity. I don’t know your age, income, personal or financial circumstances and cannot possibly suggest any financial or investing decisions for you. Seek advice from your accountant, financial advisor, and attorney before making any investing decisions. Always conduct your own due diligence before making any investing decisions. Seriously!