Turkish prosecutors investigate the $119M Dogecoin mining scam

It is reported that Turgut solicited investments from 1,500 Turkish citizens, inventing up excitement for the Dogecoin “mining” operation at in-person networking events held at luxurious locations with using Telegram group online. Investors were promised returns of 100% in 40 days and reportedly paid returns for around 3 months. Investors were told that the Dogecoin that they sent would use latest equipment to mine DOGE. Just like Bitcoin, Dogecoins are made through proof-of-work mining. Where network participants fought to validate transactions and develop the next block by algorithmically solving complex equations. The miner that solves these equations or problems mines the networks upcoming block, also accepting all the crypto contained within it as a reward. 

The operation went without any bumps on the road for its first three months, with early investors getting their returns as promised. Nonetheless, after the scheme’s total value locked (TVL) reached at 350 million Dogecoin during its fourth month, the funds actually went missing. The Chief Public Prosecutor’s Office of the Turkish suburb kucukcekmece is now taking out an investigation to locate Turgut and his 11 associates. Authorities have issued an order not allowing Turgut and his partner Gizem N. from travelling outside the country. 

The sudden increase in popularity of crypto assets in Turkey introduced an increase in scammers trying to find leverage digital assets to dupe victims out of their hard-earned cash. During April, Turkish authorities jailed six suspects linked with the failure of local crypto exchange Thodex. The exchange stopped withdrawal services earlier that month, leaving users funds on the platform. By April, four employees of the local Vebitcoin exchange were arrested for allegations of fraud just a day after Vebitcoin declared it would cease operations.