Turkey is proposing new crypto industry rules. The news comes on the heels of the sudden failure of two cryptocurrency exchanges a couple of days earlier.

The failure of Thodex and Vebitcoin, two of Turkey’s most prominent cryptocurrency exchanges, was a major hit to countless cryptocurrency investors in Turkey, who were not able to access funds worth millions of dollars in cryptos after the exchanges declared bankruptcy last week.

According to an official familiar with the situation, the government intends to establish a centralized custodian bank to eliminate counterparty behavior.

According to the official, authorities are looking into how to establish a capital threshold for cryptocurrency exchanges as well as education standards for executives in those companies.

The authorities intend to finish the preparations for a regulatory structure in the coming weeks, and the initiative is said to include prominent government institutions.

Uncertainty About Turkey’s Cryptocurrency Policy

It has been a lousy month for Turkey’s cryptocurrency sector. The Central Bank of Turkey issued a ban on the use of cryptos for payment of goods and services on April 16. The central bank warned that transactions involving cryptocurrencies posed “irrevocable risks.”

The ban will go into effect on April 30.

Last Thursday, the Istanbul-based Thodex cryptocurrency exchange ceased trading operations, leaving more than 390,000 active customers without access to their funds.

The next day, Vebitcoin announced that it had ceased operations, highlighting financial constraints.

Vebitcoin chief executive officer IIker Bas and three other employees were arrested and are now being investigated as part of a larger fraud inquiry.

Police have also had a manhunt for Thodex chief executive officer and founder Faruk Ozer, who is said to have fled to Albania with approximately $2 billion in customer funds. Interpol released a red notice for Ozer’s arrest warrant after Turkish authorities requested it.

On Friday the past week, Turkey’s Central Bank governor, Sahap Kavcıoğlu, reported that the finance ministry and the Treasury are working on broader regulation of crypto assets, but that the bank does not plan to ban them.

The chaos comes at a time when Turkey’s already burgeoning crypto boom has gained traction in the last year. Many people have used cryptos to secure their savings from the Turkish Lira’s depreciation and to hedge against inflation.

As of now, there are an estimated five million active cryptocurrency users in Turkey. According to CoinGecko.com, the regular trading volume of Turkish cryptocurrency markets in the last 24 hours was reported to be approximately $1.6 billion.