Turkey Crypto Assets Fraud Case Reveals the Importance of Regulation

Turkey has encountered some issues in promoting the liberalization of Crypto Assets, among which the most criticized is the significant losses caused to investors by the illegal activities of certain encryption projects.

On May 30, 2024, Turkey's Interior Minister announced a major operation: authorities launched a large-scale action against a suspected fraud Crypto Assets project in Ankara, detaining 127 suspects and seizing a large amount of assets and several firearms.

The project called Smart Trade Coin has sparked strong protests and condemnation from investors since 2021. According to the victims' lawyer, the number of deceived users involved in the project has reached 50,000, 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 configure automated trading bots for arbitrage trading. However, these promises are considered unrealistic.

In 2023, a chief analyst pointed out multiple times in a research article that the project is likely a Crypto Assets scam. Many users reported losing 95% of their savings and could not confirm whether these funds were appropriated by the project team. About half of the reviewers in the app store also claimed that the application is a scam.

Through blockchain analysis, several addresses suspected of being used to store and transfer stolen funds have been identified. The analysis shows that the main funds were transferred out in large amounts of ETH through specific addresses, with the amount involved being substantial and close to the estimated loss amount. These funds either flow directly to various exchanges or enter exchanges after multiple layers of transfer, aggregation, and dispersion.

Local media reported dozens of criminal lawsuits filed against the platform. In 2021, 50 people gathered in front of the Ankara courthouse to protest. Some victims claimed they were induced to take out loans or sell properties and cars to obtain the so-called "36% monthly profit." However, most customers not only did not profit, but instead fell into debt.

Analysts point out that the company's opaque operations, deceptive marketing, and lack of information all indicate that this is a well-orchestrated scam.

This incident has sparked a reflection in Turkish society on the regulation of Crypto Assets. All sectors recognize that merely pursuing the freedom of 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 gain public trust and widespread adoption.

Therefore, the Turkish government and the Crypto Assets industry need to work closely together to seek a balance between protecting investor rights, preventing financial risks, and supporting innovative development. Only by strictly adhering to compliant operations can Crypto Assets become an effective tool for promoting economic freedom and asset appreciation.