Turkish court investigate alleged $119M Dogecoin mining scam
According to Turkish media, legal authorities in the country are investigating an alleged mining scam of Dogecoin that had pulled a rug on investors following an amassed $119 million worth of deposits.
Turkish local channel TV100 initially telecasted the news on August 23, as police identified a pseudonymous “Turgut V”, an online avatar, suspected as the prime operator of the fraud scheme. As per initial reports, Turgut is assisted by 11 associates who together managed to gather about 350 million Dogecoin valuing $119 million before they disappeared.
Turgut has solicited investments from about 1500 Turkish citizens through the pretext of the Dogecoin “mining” operation at networking events held at expensive locations. The group communicated the itineraries through an online group on Telegram. Turkish investors were promised that they would get a 100 per cent return within 40 days after having made to fulfil return payments for around three months.
According to the investigation, it is revealed that investors were also informed that through the Dogecoin sent, they would buy new equipment, enabling them to mine more DOGE. Dogecoins are minted through the Proof-of-Work method, similar to Bitcoins. The participants in a network compete for validating transactions and eventually produce the next block by solving complex equations. In the process, the miner who mines the next block gets all the crypto within it as a reward.
The scam ran successfully for the initial three months as early investors received promised returns, but when the total value locked (TVL) of the scheme hit the 350 million Dogecoin mark in its fourth month, the funds vanished.
The current investigation is led by the Chief Public Prosecutor of Küçükçekmece, aiming to locate Turgut and the other 11 of their associates. Authorities have also recently issued an order to restrict Turgut and partner Gizem N. from travelling outside the country.
The increasing popularity of crypto assets in the Turkish social milieu has led to a surge in scammers who are strategizing to leverage digital assets and dupe victims of massive amounts of cash.
Turkish legal authorities have been on the lookout for such scams. In April end, the authorities had jailed 6 suspects associated with a fraudulent connection within the local crypto exchange Thodex. Thode had also abruptly stopped its withdrawal services in early April, thus causing a loss of funds on the platform.
In the same month, local exchange Vebitcoin’s 4 employees were arrested on accusations of fraud, a day after Vebitcoin had announced ceasing operations.