Turkey Crypto Assets Fraud Case: 127 People Arrested, Loss Exceeds $2 Billion

During Turkey's advancement towards the liberalization of Crypto Assets, some issues have gradually emerged. The most concerning is that the illegal activities of certain Crypto Assets projects have caused significant losses to investors.

On May 30, 2024, Turkey's Interior Minister announced a major operation: authorities launched a large-scale crackdown on a Crypto Assets scam project in Ankara, arresting 127 suspects and seizing a large amount of assets and several firearms.

The project named Smart Trade Coin has been plagued by protests and accusations from investors since 2021, suspected of being a scam scheme. Lawyers for the victims stated that approximately 50,000 users have been deceived by this project, with total losses exceeding $2 billion.

Smart Trade Coin claims to provide software that connects multiple Crypto Assets exchanges, allowing users to manage multiple exchange accounts through a single interface and set up automated trading bots for arbitrage trading. However, these promises seem too good to be true.

In 2023, a chief analyst published an investigative article about the project on their platform, repeatedly pointing out that it is likely a Crypto Assets scam. Many users commented that they have lost a significant amount of money. In the app store, about half of the reviewers claimed the app is a scam, and several users reported losing 95% of their savings.

Through blockchain analysis, we have identified some addresses that may be used to store and transfer stolen funds. The analysis shows that the STC token contract transfers the main funds through an intermediary address to another address. This address has conducted a large number of one-way ETH outflow transactions, involving a significant amount of funds, which is close to the estimated loss amount. These funds ultimately flow into various exchanges, some entering directly, while others have gone through multiple layers of transfer, aggregation, and dispersion before entering the exchanges.

Local media reported dozens of criminal lawsuits against the platform. In 2021, 50 victims protested in front of the Ankara courthouse. Some victims claimed they were induced to take loans or sell their houses and cars to obtain what was called "36% monthly profit." However, most clients not only did not receive huge returns but ended up with nothing and burdened with massive debts.

Analysts point out that the company's commitments are unrealistic. Even if they really developed arbitrage technology that could generate sustainable profits, they would not market it to retail investors. The company's opaque business practices, misleading marketing, and lack of information all suggest that this may have been a carefully designed scam from the very beginning.

This incident made various sectors of Turkish society realize that merely pursuing freedom in Crypto Assets is not enough; a corresponding regulatory framework must be established. Only in a compliant and transparent environment can the Crypto Assets industry truly earn the public's trust and acceptance.

Therefore, on the road to cryptocurrency regulation in Turkey, the government and the industry need to work together to seek a balance between protecting investor rights, preventing financial risks, and promoting innovative development. Only by strictly adhering to compliant operations can Crypto Assets truly become an effective tool for driving economic freedom and value growth.