Turkey Crypto Assets Scam Case: Multiple Suspects Arrested, Investors Suffer Huge Losses

Turkey has recently encountered some serious issues in the Crypto Assets field, particularly some illegal projects that have caused significant losses to investors.

On May 30, 2024, the Turkish Interior Minister announced that authorities launched a large-scale operation against a Crypto Assets scam project in Ankara, resulting in the detention of 127 suspects and the seizure of significant assets and several firearms.

The project involved is called Smart Trade Coin. Since 2021, Turkish investors have been protesting and condemning the practices of this project, suspecting it to be a scam scheme. According to the victims' lawyer, the project has deceived around 50,000 users, resulting in losses of over $2 billion.

Smart Trade Coin claims to offer software that can connect to multiple Crypto Assets exchanges. It asserts that it can help users manage multiple exchange accounts through a single interface, configure automatic trading bots, and profit by arbitraging the price differences between exchanges.

However, multiple studies indicate that the project is likely a Crypto Assets scam. Many users report losing 95% of their savings and are unable to verify the whereabouts of their funds. In the app store, about half of the reviews claim that the app is a scam.

Through on-chain analysis, we have identified some suspected scammers' addresses used for storing and transferring stolen funds. The analysis shows that the STC token contract distributes a large amount of funds through a certain address, which has conducted a significant number of one-way ETH outflow transactions, involving substantial amounts, closely matching the estimated loss amount disclosed. The flow of funds indicates that some funds go directly to various exchanges, while others ultimately flow into exchanges after multiple layers of transfer, aggregation, and distribution.

In 2021, 50 people gathered in front of the Ankara court to protest Smart Trade Coin and its team. Victims' lawyers stated that despite multiple complaints, no action was taken at that time. Some victims claimed they were encouraged to take out loans or sell their RVs to earn "36% profit per month", but ultimately ended up deeply in debt.

Analysts point out that the company's claims are unrealistic. Even if a consistently profitable arbitrage technology is developed, it will not be marketed to retail investors. The company's opaque business practices, deceptive marketing, and lack of information all indicate that this is a scam.

This incident made Turkish society realize that merely pursuing Crypto Assets freedom is not enough; a corresponding regulatory framework must be established. Only in a compliant and transparent environment can the Crypto Assets industry truly gain trust and adoption.

The Turkish government and industry need to work together to seek a balance between protecting investors' rights, preventing financial risks, and supporting innovative development. Only on the basis of adhering to compliance operations can Crypto Assets become an effective tool for promoting economic freedom and value preservation.