Turkish Crypto Founders robbed Investors for Millions

Turkish residents became the victims of huge scam: Turcoin, “national” digital currency, was founded to be a Ponzi scheme, its founders ran away with money
19 June 2018   218

As claimed in the Turkish Minute, the founders are supposed to have cheated about 10,000 investors for at least 100 million Turkish lira (around $21 million). Nevertheless, the Ahval News informed the stolen amount to be 1 billion Turkish lira ($212 million), making it one of the largest scams to date.

The coin was ran by the firm Hipper, placed in Istanbul. The exchange was established by Muhammed Satıroğlu and Sadun Kaya last year. They organized a massive marketing campaign for the promotion of the coin and arranged the parties attended by many Turkish celebrities. The word about the cryptocurrency exploded as the firm gave away luxury cars to its early adaptors in October last year.

The business model of the coin has likeness with classic Ponzi schemes as the organization was rewarding the existing investors who were attracting new participants. The suspicion for the model increased over time and shadiness of its business were affirmed as the company ceased paying bonuses from early June.

I was only a mediator. Our company Hipper does not even have a single dollar in the bank. All the money went to Sadun Kaya’s company in Cyprus. I have not fled with the money. I will return all the money to the members if authorities unblock my bank accounts.
Muhammed Satıroğlu
Stakes Owner, 49 Percent of Hipper

The real causer seems to be Sadun Kaya, the majority partner of Hipper, who stopped answering phone calls of his business partners.

Financial Establishments warned by UK Central Bank

The Bank of England’s Prudential Regulation Authority (PRA) reminded financial institutions`CEOs that activity with crypto-assets may cause “reputation risks”
29 June 2018   206

In a letter dated June 28th to CEOs of banks, insurance firms, and designated investment companies, PRA Deputy Governor Sam Woods briefs leaders to act in correspondance to regulatory rules and work with the PRA to reveal any sort of information the financial watchdog would deem as important.

In his letter Woods writes how the cryptocurrency industry has experienced fast growth but is filled with “high price volatility and relative illiquidity.” He claims it is vulnerable to nefarious activities like money laundering and terrorist financing. The letter approves: “crypto-assets should not be considered as currency for prudential purposes,” but discussions are still going on about the prudential treatment of crypto-assets.

The letter points out risk strategies and management systems the PRA considers as appropriate in demands to cryptocurrency. The members and senior leadership demand PRA approved individual to sign off on any sort of risk assessment procedure a firm has “for any planned business direct exposure to crypto-assets and/or entities heavily exposed to crypto-assets.”

The PRA as well recommends businesses to conduct their necessary diligence before exposure to crypto-assets and directs firm leadership to rely on expert voices to assess risk. Finally, the watchdog awaits firms to keep governing contacts abreast about any cryptocurrency-related activity or planned exposure and give a risk estimation about supposed exposure.