Turkey’s “Crypto King” fiasco is a wake-up call for alternative investors around the world
Before we talk about the “Crypto King” leak with $ 2 billion, it wouldn’t surprise anyone if his story was turned into a Hollywood caper movie. Four months ago Faruk Fatih Ozer, the founder of Thodex, a cryptocurrency exchange, fled Turkey to Albania, after raising $ 2 billion from hundreds of investors to invest in crypto promising currencies and returns.
He succeeded despite the fact that these Turkish investors find that most forms of investment are closed to them. For example, gold, an all-time safe haven, has disappeared from Turkish markets, while investors in the real estate sector face insurmountable hardships as the pound continues to collapse day by day. (The dollar’s price topped eight lire from two lire a decade ago.) These conditions have created an environment conducive to fraudsters, including using cryptocurrencies, with the promise of high returns, to which millions of investors around the world believed and continue to believe. Even though there is no economic data to justify these claims.
So, the emergence of crypto kings is part of this process, especially as cryptocurrency exchanges have started to spread rapidly. Even the ban on the use of cryptocurrencies has failed to stop its transactions.
A failed intervention
The Central Bank of Turkey has banned the use of cryptocurrencies and crypto assets for the purchase of goods and services, claiming that there are significant risks in these transactions. This means that the actions initiated by the Turkish authorities in issuing an international arrest warrant for the arrest and surrender of Faruk may not be successful, knowing that even if he is arrested, the $ 2 billion will not return because they would be deposited in secret accounts and under several names that are difficult to trace.
Such a scenario puts those who have lost their savings in a real difficult situation, especially since some of them have put most of their savings into this cryptocurrency exchange. The Washington Post recently noted that President Biden’s administration is currently reviewing the rules governing the cryptocurrency market to determine whether further restrictions are needed to track digital assets and prevent their use in certain activities, such as sponsorship. terrorism.
The latest move came from Britain announced the ban on the world’s largest crypto exchange Binance, stating that the platform cannot conduct any regulated activity in the UK. The Financial Conduct Authority has warned traders not to deal with Binance and advised people to beware of advertisements promising high returns on crypto assets. The authority also asked Binance to remove all promotional material.
Such strict measures show how dangerous the activities of these exchanges have become for investors and economies, although there are companies officially licensed and registered to trade cryptocurrencies in many countries, including Great Britain. and the United States. The US Treasury Department has asked to impose taxes on business-to-business cryptocurrency transfers to increase revenue, meaning crypto transactions will be subject to strict regulations.
But this does not constitute a guarantee that the assets will not be lost for any reason, including losses resulting from speculation or bankruptcy, as well as from fraud. In May, Bloomberg reported that BlockFi, a cryptocurrency lending company, had mistakenly deposited $ 10 million worth of bitcoin into some of its users’ accounts. The company said it would recover those funds.
What has been mentioned is a small part of the top of a mountain which can crumble and cost investors dear …
The writer is an energy and economic affairs specialist in the Gulf.