Turkish media says that Turkish authorities are investigating an alleged Dogecoin mining fraud in which investors were duped out of $119 million in deposits.
The story was first reported on Aug. 23 by local channel TV100, with authorities identifying the scheme’s accused operator as the pseudonymous online persona “Turgut V.” Turgut and 11 colleagues are said to have amassed up to 350 million Dogecoin worth $119 million before fleeing.
Turgut reportedly sought contributions from 1,500 Turkish citizens by generating excitement for the Dogecoin “mining” operation through in-person networking events conducted in upscale places and an online Telegram group. 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. Similar to Bitcoin, Dogecoins are created by Proof-of-Work mining, in which network participants compete to validate transactions and construct the next block by solving complicated mathematical problems computationally. The miner that solves the equation mines the network’s next block and is rewarded with all of the cryptocurrency contained within.
For the first three months, the operation worked successfully, with early investors receiving their promised profits. However, the cash purportedly vanished once the scheme’s total value locked (TVL) reached 350 million Dogecoin in 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 traveling outside the nation by authorities. The recent surge in popularity of crypto assets in Turkey has resulted in a rise of scammers attempting to defraud victims of their hard-earned money using digital assets.
Turkish authorities arrested six suspects in connection with the collapse of local cryptocurrency exchange Thodex in late April. Earlier that month, the exchange abruptly suspended withdrawal services, leaving consumers’ cash on the platform. Additionally, in April, four workers of the local Vebitcoin exchange were arrested on fraud charges just one day after Vebitcoin declared its closure.
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