Author: Beosin
It has been reported before that Turkey has been facing some problems in its pursuit of cryptocurrency freedom. The most criticized is that some local crypto projects have violated laws, causing huge losses to investors.
On May 30, 2024, the Turkish Interior Minister revealed that the authorities conducted a large-scale operation against a cryptocurrency fraud project in Ankara, 127 suspects were detained, and a large amount of assets and several guns were seized.
The project involved is called Smart Trade Coin. Since 2021, Turkish investors have been protesting and condemning the project's practices, and the project is suspected to be a scam. According to the victims' lawyers, the number of users deceived by the project is as high as 50,000, and the amount of losses exceeds 2 billion US dollars.
What is Smart Trade Coin (STC)?
Smart trade coin claims to provide software that connects to multiple cryptocurrency exchanges. It claims to help users manage multiple cryptocurrency exchange accounts using one application, allowing them to:
Use all exchanges through a single interface,
Configure the automated trading robot to trade automatically and earn profits by arbitrage price differences between exchanges as follows:
Is Smart Trade Coin (STC) a scam?
In 2023, Cem Dilmegani, chief analyst of AI Multiple, shared a research article about the project on the Ai Multiple platform. The article repeatedly stated that the project is likely to be a cryptocurrency scam, and many users below also stated that they had been defrauded of a large amount of funds.
About half of reviewers on the App Store called the app a scam.
Many users reported that they lost 95% of their savings, with users losing their savings and unable to verify that the funds were not taken by the Smart Trade Coin (STC) team.
After Beosin KYT on-chain analysis, we have locked down some addresses that are suspected to be used by the fraudsters to store and transfer the stolen funds.
Since the flow and address of the stolen funds have not been made public, we conducted relevant money laundering analysis and tracking of the stolen funds based on the project name Smart Trade Coin and using Beosin KYT.
From the figure, we can see that the STC token contract distributed the main funds to the 0xc12c address through the 0x5f45 address. According to the extended transaction method, we can see that this address has a large number of ETH one-way outflow transactions, and the funds involved are huge, close to the estimated loss amount published, and the transaction fees of the addresses involved in the outflow of ETH all come from the 0xc12c address, so we have reason to suspect that this address is the address where the stolen funds are distributed.
The figure only shows a small part of the fund flow, and the address involved more than 20,000 outflow transactions. Based on this small part of the transaction display, it can be seen that after the suspected fraud address distributed funds, some funds flowed directly to various exchanges, while some funds were transferred, aggregated and dispersed at multiple levels, and finally flowed into the exchange.
Should a local regulatory framework be established?
Kocaeli newspaper reported dozens of criminal cases filed against the cryptocurrency trading platform. In 2021, 50 people gathered in front of the Ankara Court to protest against Smart Trade Coin and its team.
The company defrauded more than 50,000 people in Turkey, according to the victims’ lawyer, Yagiz Kaya. At the time, the company took no action despite numerous complaints and an estimated $2 billion in investor losses.
Additionally, some victims said they were encouraged to take out loans and sell their homes or cars to make “36% monthly profits.”
Instead of making huge profits, most clients end up with nothing and heavy debt.
AI Multiple lead analyst Cem Dilmegani noted that the company’s claims were unrealistic. The now-offline website claimed to “provide software to connect to multiple cryptocurrency exchanges” and “help users manage multiple cryptocurrency exchange accounts using one application.”
Even if the company develops technology to generate consistent returns through arbitrage, it will not market itself to retail investors. It will raise funds and conduct large-scale arbitrage.
Finally, the analysts stressed that the company’s opaque business practices, deceptive marketing, and lack of information all indicated that the company was a scam from the start.
This incident has made all sectors of Turkish society realize that simply pursuing cryptocurrency freedom is not enough, and a corresponding regulatory framework must be established. Only in a compliant and transparent environment can the cryptocurrency industry be truly trusted and adopted by the public.
Therefore, in Turkey's cryptocurrency regulation path, the government and the industry need to cooperate with each other to seek a balance between safeguarding investor rights, preventing financial risks, and protecting innovative development. Only under the premise of adhering to compliant operations can cryptocurrency truly become a powerful tool for promoting economic freedom and hedging value-added.