Founders Of Turcoin Cryptocurrency Arrested For Ponzi Scheme

Sadun Kaya and Muhammed Satiroglu, founders of Turkey’s ‘National Cryptocurrency’ known as Turcoin, have been arrested recently as part of an ongoing investigation over their corporation thanks to users claiming them running a Ponzi scheme.

Three other members from the Turkey Cryptocurrency project have been released on bail.

Sadum Kaya and Muhammed Satiroglu are the founders of Hipper, an Istanbul-based company. They presented a new Cryptocurrency called Turcoin, claiming it as Turkey’s national digital currency. They were involved in a Crypto-related Ponzi scheme, where they cheated more than 10,000 users.

Complaints Regarding The Company

At the beginning of June, many users who invested on Turcoin filed a criminal complaint after Hipper suspended bonus payments and the Istanbul customer support center stopped answering calls. These reports led to the detention of Kaya and Satiroglu in mid-June but released on probation. Later on, investigations led to new evidence who would seriously risk their innocence, jailing them later on July 2nd.

After all these reports and when suspicion started rising, Kaya appeared to have fled the country with more than $21 million in Turkish Lira (Around 100 million Turkish Lira), which he took from Turkish investors.

The other founder, Satiroglu denied all participation in the illegal activities, but he didn’t reveal his whereabouts.

Ponzi Scheme: The Ongoing Scam Chain

 Known as Ponzi scheme or Ponzi game, it’s a species of fraud made famous by Charle Ponzi who used this technique around in the 1920s. The way it operates is that a “businessman” induces investors to spend their money on a product and generates profits for previous investors with money obtained from new ones. Usually, investors will think that profits originate from sales or stock growth and will start ‘investing’ again.

This scheme will maintain an illusion of sustainable business as long as most of the investors do not demand full repayment, keeping faith in fictional assets that they are made believe they own.

Charles Ponzi wasn’t the first one to use this scheme; he was the one who made it popular, but the first major case of a Ponzi Scheme was Sarah Howe in the 80’s, where she offered an 8% interest rate per month to a female-only clientele. She was discovered and arrested for three years after finding out she had stolen the money invested by the women.

Cryptocurrency Frauds

Maybe this time Turkey was the victim, but Cryptocurrency fraud cases tend to pop up now and then; they defy borders. Regulatory bodies are starting to collaborate internationally to fight this situation.

There’s a service known as the US Internal Revenue Service or IRS who allied with tax authorities from a couple of countries, including Australia, Canada, UK and the Netherlands; this project came together to fight tax crime and money laundering with Cryptocurrencies.

Many corporations like IRS are starting to rise in order to take down Cryptocurrency frauds, making the Cryptocurrency community a trustable and stable place for everyone to enjoy.