Turkish media has reported that authorities in the country are investigating claims of a Dogecoin (DOGE) mining scam that pulled the rug on investors after it amassed a staggering $119 million worth of deposits. The Unsuspecting DOGE investors were promised 100% returns in 40 days in exchange for depositing their funds.
An August 23 report from local channel TV100 broke this news, with the police identifying some pseudonymous online avatar “Turgut V.” As the scheme’s suspected operator.
Authorities are convinced that Turgut and 11 associates managed to gather nearly 350 million Dogecoin valued at about $119 million before disappearing. Turgut allegedly solicited investments from 1,500 Turkish citizens, increasing the excitement surrounding Dogecoin ‘mining’ operation at in-person networking events that were held at ritzy locations, and by using a Telegram group active online.
Investors were lured with a promise of 100% returns within 40 days and allegedly paid returns for nearly 3 months. The investors were told that the Dogecoin they had sent would procure new equipment to mine DOGE. Just like Bitcoin, DOGE is developed via Proof-of-Work mining, where the network participants compete to authenticate transactions and produce the next block by computationally solving several complex equations.
The miner that manages to solve the equation mines the network’s next block and receives all of the crypto contained within it as a reward. Operations ran smoothly for the first three months, with the early investors getting their returns as promised. Nonetheless, after the scheme’s total value locked (TVL) peaked at 350 million Dogecoin in its fourth month, the funds allegedly disappeared.
For now, the Chief Public Prosecutor’s Office of the Turkish suburb Küçükçekmece is conducting an investigation aiming to locate Turgut and his 11 associates. Authorities have already issued an order that restricts Turgut and Gizem N, from traveling outside the country.
The recently growing popularity of cryptocurrencies in Turkey has also introduced an increase in scammers who seek to leverage digital assets to dupe their victims out of their hard-earned cash.
At the end of April this year, Turkish authorities jailed six suspects who were associated with the collapse of Thodex, a local crypto exchange. Thodex abruptly stopped its withdrawal services earlier that month, stranding the users’ funds on the platform.
Also in April, four staff members of the local Vebitcoin exchange were apprehended for allegations of fraud a day after the platform announced that it would cease its operations.