Previously, we reported that as Turkey pursues the path to cryptocurrency freedom, some problems have become increasingly apparent. Most notably, illegal behavior by local cryptocurrency projects has caused significant losses to investors.

On May 30, 2024, the Turkish Minister of the Interior revealed that the authorities carried out a large-scale operation against a cryptocurrency fraud project in Ankara, with 127 suspects detained and a large amount of assets and several firearms seized.

The project involved is called Smart Trade Coin. Since 2021, Turkish investors have been protesting and condemning the project's practices, suspecting it to be a fraudulent project. According to the victims' lawyer, the number of users deceived by the project is as high as 50,000, with losses exceeding $2 billion.

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 accounts on multiple cryptocurrency exchanges using one application, enabling them to:

Use all exchanges through a single interface,

Configure automatic trading robots for automatic trading, and earn profits by arbitraging price differences between exchanges, as shown below:

Smart Trade Coin（STC）is eyewash?

In 2023, Cem Dilmegani, the Chief Analyst of AI Multiple, shared a research article on the Ai Multiple platform about the project, repeatedly indicating that the project is likely to be a cryptocurrency scam. Many users below also expressed that they have been deceived of a large amount of funds.

In the app store, about half of the reviewers call the app an eyewash.

Many users have reported losing 95% of their savings. Users lost their savings and are unable to verify that these funds were not taken by the Smart Trade Coin (STC) team.

Through Beosin KYT on-chain analysis, we have identified some suspicious addresses used by fraudsters to store and transfer stolen funds.

Due to the undisclosed flow of stolen funds and addresses, we conducted 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 main funds of the STC token contract are distributed to the 0xc12c address through the 0x5f45 address. According to the method of extended transactions, we can see that this address has carried out a large number of ETH one-way outflow transactions, involving a huge amount of funds, which is close to the estimated loss amount announced. 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 used to distribute the stolen funds.

The figure shows only a small part of the fund flow, and the address is involved in more than 20,000 outgoing transactions. Based on this small portion of the transaction display, it can be seen that after the suspected fraudulent address distributed the funds, some of the funds directly flowed to various exchanges, while some funds were transferred, aggregated, and dispersed through multiple layers, and ultimately still flowed into the exchange.

Should the corresponding regulatory framework be established locally

The Kocaeli newspaper reported on dozens of criminal cases filed by Long Wick Candle against the Crypto Assets trading platform. In 2021, 50 people gathered in front of a court in Ankara to protest against Smart Trade Coin and its team.

Victims' lawyer Yagiz Kaya said that the company deceived over 50,000 people in Turkey. Despite numerous complaints and an estimated loss of $2 billion in investor funds, the company took no action.

In addition, some victims said they were encouraged to take out loans and sell their houses or cars to earn "monthly profits of 36%."

Most customers not only fail to make huge profits, but also end up empty-handed and heavily in debt.

AI Multiple's Chief Analyst Cem Dilmegani pointed out that the claim made by the company is unrealistic. The now offline website claimed to provide software that connects to multiple cryptocurrency exchanges and helps users manage multiple cryptocurrency exchange accounts with one application.

Even if the company develops technology that generates sustained profits through arbitrage, it will not market itself to retail investors. Instead, it will raise funds and engage in large-scale arbitrage.

Finally, analysts emphasize that the company's opaque business practices, deceptive marketing, and lack of information all indicate that the company was an eyewash from the beginning.

This incident has made various sectors of Turkish society aware that it is not enough to pursue cryptocurrency freedom alone, and a corresponding regulatory framework must be established. Only in a compliant and transparent environment can the cryptocurrency industry truly be trusted and adopted by the public.

Therefore, in the regulatory path of cryptocurrency in Turkey, the government and the industry need to cooperate with each other to seek a balance between protecting investors' rights, preventing financial risks, and promoting innovative development. Only under the premise of compliance operation, can cryptocurrency truly become a powerful tool to promote economic freedom and value preservation.