Turcoin: Turkey’s ‘National Cryptocurrency’ Is Alleged Ponzi Scheme

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Turcoin, advertised as “the national cryptocurrency of Turkey” has been revealed as a multi-million-dollar Ponzi scheme as it collapsed in disgrace. Some 12,000 individual investors are thought to have been affected. Many had sunk their life savings into the project, after Turcoin promised swift dividends and implied it had the backing of the Turkish government.

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Local newspaper Posta reported that Turcoin’s parent company Hipper A.Ş. took 100 million Turkish lira ($20.6m) from investors.

The joint owners — Sadun Kaya and Muhammed Satıroğlu — ran Hipper A.Ş. out of the Turkish capital Istanbul and put the first Turcoin on sale in October 2017.

But by June 2018, the promised returns had failed to materialize and investors started to raise warning flags with the Turkish financial watchdog, the Capital Markets Board.

Investigators from the Kochaeli Public Prosecutor’s Office reportedly froze Kaya and Satıroğlu’s assets after uncovering the alleged fraud.

Both were arrested on June 19 and released on bail, but were re-arrested on July 2 and remanded in custody while awaiting trial. Read more

How Turcoin Made Millions

Turcoin raised eyebrows across Turkey with a series of lavish promotional events, often attended by local celebrities, alongside repeat TV advertising. Early investors were promised outlandish luxury gifts, such as Mercedes and BMW cars.

The original adverts claimed that backers would make a 16 percent profit on their initial investment of 1,500 Turkish lira (TRY). When they had signed up enough other investors, they would receive a payment of 250 TRY.

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The success story of Turcoin

It was a bold claim — and tempting — given Turkey’s severe financial woes. The average worker is paid just $455 dollars a month. Turkey’s government is also in a perpetual state of emergency after a failed military coup in June 2016.

President Recep Erdoğan was re-elected in June 2018 and immediately set about firing thousands of public sector workers. Over 160,000 people have been sacked since Erdoğan took charge.

Crypto in Turkey

One local commenter wrote on Twitter that the experience had soured enthusiasm for cryptocurrency in the country: “In the public opinion, there is a serious loss of confidence in domestic crypto money ventures.”

The confusion in Turkey is perhaps not surprising, given that there has been repeated political interest in cryptocurrencies.

In February 2018, Turkey’s Nationalist Movement Party proposed a “national Bitcoin” in a 22-page paper on regulating cryptocurrencies.

The same month, the country’s deputy Prime Minister Mehmet Simse told CNN’s Turkish affiliate that the government was looking to release its own state-backed cryptocurrency. Read more

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If it’s too good to be true !

What Turcoin says

The case is ongoing, and while the company has pushed back against the mountain of cripplingly negative publicity, the Hipper A.Ş. Twitter account, @HipperIstanbul, is no longer available. Its website was replaced with a statement that reads: “Announcement: The proceedings have been suspended due to the ongoing legal process.”

A startling statement on the Turcoin website protests its innocence saying: “We have shared the data requested by the relevant authorities within the scope of the investigation and we have stopped accessing the wallet in order to prevent further processing.” The statement goes on to accuse Turkish journalists of being corrupt or incompetent: “We remind you of the importance of not taking into account such frivolous news organizations in our country where the journalism profession is on its last legs.”

Turcoin is still claiming that it will be able to refund investors “once the investigation and subsequent judicial process is completed.” Hipper A.Ş. is jointly owned by Satıroğlu and Kaya with 49 percent and 51 percent shares respectively.

Image credit: Casal Partiu, CC BY-SA 2.0

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This article was originally published by Mr. Tom Rodgers (UK-based freelance tech writer and editor with interests in cybersecurity, financial crime, regulation and the law.). Read more about it https://coincentral.com/turcoin-turkeys-national-cryptocurrency-is-alleged-ponzi-scheme/

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