Crypto Asset Fraud: Common Schemes, Legal Analysis & What Victims Should Do

Introduction
Crypto assets present enormous potential. Their borderless nature, decentralised architecture and rapid evolution make them attractive for innovation — yet these very qualities also render them fertile ground for fraudsters. As the volume and variety of crypto-asset transactions grow, so too do sophisticated fraud methods. This article maps out typical crypto-asset fraud schemes, evaluates them under Turkish criminal law, and offers practical guidance for victims and advisors.

Key Fraud Schemes in the Crypto-Asset Arena

1. Fake Exchanges & Phishing Platforms
   Fraudsters establish websites or mobile apps styled to mimic legitimate crypto exchanges. Users are directed to these platforms, input login credentials or secret keys, and the fraudster gains access to the real exchange account — enabling funds to be drained. While leading exchanges deploy measures such as two-factor authentication, newer or poorly secured platforms remain vulnerable.

2. Ransomware & Social-Engineering Demands
   Sophisticated schemes employ malware or hijacked social-media/e-mail accounts to initiate crypto transfers. The user may receive what appears to be a message from a trusted associate requesting a crypto payment. Unwittingly, they send assets to the fraudster’s wallet. “Friendly fraud” via compromised credentials and bogus investment links are typical in this category.

3. Fake Shops & Pre-Sale Token “Rug Pulls”
   Some ecommerce sites accept crypto payments but never deliver the product. Others involve tokens or pre-sales (so-called ICOs) which solicit funds, then vanish afterwards. These “rug-pull” operations often rely on a veneer of legitimacy and urgent promotional pitches.

4. Scam Tokens & Price-Manipulation (“Pump & Dump”)
   Fraudsters create tokens, retain large holdings themselves, then deploy aggressive marketing to inflate the price. Once the unsuspecting retail investors are onboard, the originators sell out and the value collapses. In Turkey, because crypto assets are not yet formally regulated as securities, regulatory protections may be weaker in this context.

5. Ponzi / Pyramid Schemes in the Crypto Space
   Traditional Ponzi models are increasingly adapted to the crypto sector: early investors are paid returns from funds of newer investors. The platform may freeze withdrawals or disappear entirely once a threshold is reached. Turkey has seen high-value cases involving such models in recent years.

6. Cryptojacking (Hidden Mining Without Consent)
   In this lesser-known but significant risk area, victims’ devices (PCs, servers) are covertly used for mining crypto assets via malware or malicious scripts. Though the victim may not send crypto themselves, the unauthorised use of computing power and electricity raises both criminal and civil liability issues.

Legal Framework in Turkey: Analysis

• While the Turkish Penal Code (TCK) does not currently contain a specific offence labelled “crypto-asset fraud”, most of the schemes described above can be prosecuted under the general provisions of the fraud offence (Art. 157) and its aggravated version (Art. 158).

• Where fraud is committed by means of information systems or with media/broadcast support, Art. 158(1)(f) and (g) may apply, increasing the severity of the sentence.

• Some schemes also implicate parallel offences such as unauthorised access to information systems (Art. 243), misuse of electricity or service (Art. 163) and organised crime provisions where relevant.

• In practice, establishing the Turkish Lira equivalent of the crypto-asset value at the time of the offence is often critical for calculating financial penalties and fines. Given the high volatility of crypto markets, forensic experts may need to derive a reliable reference value (e.g., average daily exchange rate at the implicated exchange).

• The maximum imprisonment under Art. 158 begins at three years and may reach up to ten years or more where an organised group is involved.

Action Plan for Victims (and Their Counsel)

• Immediate account containment: Contact the exchange, wallet provider or bank to halt transfers, freeze accounts and preserve relevant logs.

• Document evidence: Save communication records (e-mails, chats), transaction hashes, screenshots of wallet addresses and withdrawal attempts.

• File a criminal complaint: Submit the case to the competent public prosecutor’s office with a detailed chronology and evidence. Include any international dimension of the transfers.

• Engage technical forensic assistance: In cross-border schemes, blockchain analytics and tracing tools may assist in identifying wallet flows and exchanges of funds.

• Consider civil recovery options: Where funds have moved into identifiable accounts, pursue asset tracing, freezing orders or civil litigation under Turkish enforcement mechanisms.

• Inform regulators and exchanges: Large-scale incidents may trigger compliance review by exchanges, regulatory bodies or even cross-border cooperation.

Conclusion
The growth of crypto-asset markets carries great promise — but also a concomitant rise in sophisticated fraud schemes. Turkey’s existing criminal law regime is capable of addressing many of these schemes. Nevertheless, rapid innovation in the sector demands continuous vigilance, stronger regulatory frameworks and faster cross-border enforcement. For investors, service providers and legal advisers alike, a proactive approach to prevention, detection and response is essential. When loss occurs, swift action, proper evidence and experienced legal support are the keys to minimising damage and pursuing recovery.