Turkey Eyewash Case: Hundreds of Millions in Funds Involved, 127 People Arrested

Recently, the Turkish cryptocurrency sector has once again become the focus of attention. As the country continues to advance on the path of cryptocurrency liberalization, some issues have gradually come to light, among which the most concerning is the massive losses caused to investors by the illegal activities of certain encryption projects.

On May 30, 2024, the Turkish Interior Minister announced a major operation: a large-scale raid was conducted in Ankara against a cryptocurrency project suspected of eyewash. In this operation, law enforcement detained 127 suspects and seized a large amount of assets and several firearms.

This controversial project is called Smart Trade Coin. As early as 2021, Turkish investors began to question and protest the way the project operated, suspecting it of eyewash. According to the victims' representative lawyer, the number of affected users of the project has reached as high as 50,000, with the amount involved exceeding $2 billion.

Smart Trade Coin claims to provide software that connects multiple cryptocurrency exchanges. It claims to help users manage multiple exchange accounts through a single interface and configure automated trading bots for arbitrage trading to earn profits. However, these promises were quickly proven to be eyewash.

In 2023, a senior analyst published an in-depth analysis of the project on their research platform, repeatedly pointing out that the project is very likely a well-planned encryption eyewash. After the article was published, a large number of users commented that they had suffered significant financial losses.

In major app stores, about half of the user reviews claim that the application is an eyewash. Many users report losing up to 95% of their savings and question whether these funds have been embezzled by the project team.

Using blockchain analysis tools, we have identified several addresses suspected of being used for storing and transferring stolen funds. The analysis shows that the STC token contract transferred a large amount of funds to a main distribution address through intermediary addresses. This address conducted large-scale one-way ETH outflow transactions, with the amount of funds involved being close to the publicly estimated loss amount. After these funds flowed out, some went directly to major exchanges, while others flowed into exchanges after multiple layers of transfers, aggregation, and dispersion.

This case has sparked widespread discussion in Turkey. In 2021, 50 victims gathered in front of the Ankara courthouse to protest Smart Trade Coin and its team. The victims' lawyer stated that despite multiple complaints at the time and investor losses estimated at up to $2 billion, relevant authorities have not taken effective action.

What is even more concerning is that some victims claim they were induced to take out loans or sell properties and cars to invest in the project, with promises of "36% monthly profits." However, most customers not only did not receive the promised high returns, but instead suffered heavy losses and even ended up deeply in debt.

Industry experts point out that the company's promotional content is clearly unrealistic. If they really developed an arbitrage technology that could generate sustainable profits, it would be unlikely to market it to retail investors; a more plausible approach would be to raise large amounts of capital for large-scale arbitrage operations.

Experts emphasize that the company's opaque business practices, misleading marketing, and lack of information all indicate that this has likely been a carefully designed eyewash from the very beginning.

This event has made all sectors of Turkish society realize that merely pursuing freedom in cryptocurrency is far from enough; a sound regulatory framework must be established. Only in a compliant and transparent environment can the cryptocurrency industry truly earn public trust and acceptance.

Therefore, on the future path of 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 under the strict premise of compliance can encryption truly become a powerful tool for driving economic freedom and achieving asset preservation and appreciation.