Hulya Ozkal thought she was investing wisely when she ploughed her savings into Bitcoin.
“Maybe it wasn’t millions but I saved half a Bitcoin for the future,” the 65-year old pensioner told Al Jazeera.
In most circumstances, that bet would be paying off handsomely this year. One Bitcoin was worth just over $29,000 at the open of 2021, according to Coinbase, soaring to a high of nearly $65,000 last month before giving back some of those gains to currently trade above $55,000.
Meanwhile, the Turkish lira has plummeted more than 10 percent in value against the US dollar since the beginning of January.
Ozkal, who ran a beauty salon and other businesses, said her crypto holdings were worth roughly 279,000 lira (around $33,600). But she fears those assets are now lost forever.
She is one of the hundreds of thousands of unfortunate investors who held an account with Thodex – a local crypto exchange which halted trading abruptly last month, sparking a probe, a wave of arrests and an international manhunt for Thodex’s CEO, who reportedly fled to Albania with $2bn belonging to some 400,000 clients.
“I thought about burning everything down and committing suicide,” said Ozkal. “I closed my business, I sold my house. Now I’m in debt.”
Thodex is not the only cautionary tale that has shaken Turks’ faith in investing in cryptocurrencies as a hedge against a weakening lira and double-digit inflation. Two days after Thodex went offline, another local crypto exchange, Vebitcoin, announced it was halting operations due to financial strain.
Financial watchdogs in Turkey started to tighten their grip on the loosely regulated crypto sector only last month.
On Friday, a decree announced in mid-April came into force banning cryptocurrencies for payments. The next day, a presidential order added crypto exchanges to the list of firms subject to anti-money laundering and terrorism financing rules.
But for many, that government intervention came too late, leaving many at a loss as to where they can safely shield their savings.