Authorities in Turkey are investigating an alleged Dogecoin mining scheme that swept investors under the rug after amassing $119 million in deposits, according to Turkish media.
The story was first reported by local channel TV100 on August 23rd, with authorities identifying the scheme’s suspected operator as pseudonymous online persona “Turgut V.”
Turgut and 11 colleagues are thought to have amassed up to 350 million Dogecoin worth $119 million before fleeing.
Turgut is said to have enlisted the help of 1,500 Turkish residents, generating interest in the Dogecoin “mining” operation through in-person networking events and an online Telegram channel. Investors were promised 100% profits in 40 days and were supposedly paid for around three months.
Investors were assured that the Dogecoin they sent will be used to purchase new mining equipment. Dogecoins, like Bitcoin, are created through Proof-of-Work mining, in which network participants compete to validate transactions and generate the next block by solving complicated equations computationally.
As a reward, the miner who solves the equation mines the network’s next block and receives all of the cryptocurrency contained within it.
For the first three months, the operation worked successfully, with early investors receiving their promised profits. The monies purportedly vanished when the scheme’s total value locked (TVL) peaked at 350 million Dogecoin during its fourth month.
The Turkish suburb of Küçükçekmece’s Chief Public Prosecutor’s Office is currently conducting an inquiry to locate Turgut and his 11 associates. Turgut and his partner Gizem N. have been prohibited from leaving the country, according to authorities.
The rise in popularity of crypto assets in Turkey has prompted an increase in scammers looking to use digital assets to defraud victims of their hard-earned money.
Turkish authorities arrested six people in connection with the collapse of the local cryptocurrency exchange Thodex at the end of April. Earlier that month, the exchange had unexpectedly ceased withdrawal services, leaving consumers’ cash stranded on the platform.
In April, four employees of the local Vebitcoin exchange were arrested on fraud charges barely a day after the firm announced its closure.
