Turkey Seizes FTX Assets in SBF Investigation

Turkish authorities have moved decisively to recoup suspicious assets connected to the defunct FTX cryptocurrency exchange, with founder Sam Bankman-Fried now under formal investigation by the nation’s Financial Crimes Investigation Board (MASAK). According to a statement released by the Turkish Treasury and Finance Ministry, assets belonging to Sam Bankman-Fried and other partners have been seized as part of the investigation into FTX’s collapse. The ministry confirmed that a confiscation measure was implemented against the suspects’ assets following the initiation of legal proceedings.

The investigation has revealed that FTX Turkey, the local branch of the exchange, failed to properly preserve user trust, with authorities expressing strong suspicion of criminal activity. The notice from MASAK specifically highlighted that Bankman-Fried directly or indirectly influences the organizations and individuals through which FTX operates in Turkey. Since November 14, MASAK has been conducting a thorough examination of FTX Turkey’s operations, uncovering what officials describe as clear evidence of misconduct.

Finance Minister Nureddin Nebati addressed the situation with a stark warning to Turkish investors, emphasizing that the cryptocurrency market should be approached with maximum caution due to the dual dangers and opportunities presented by digitization. This cautionary stance comes at a critical time for Turkish citizens, many of whom turned to cryptocurrency investments in recent years as a hedge against the Turkish lira’s skyrocketing inflation and to protect their savings from currency devaluation.

The timing of FTX’s collapse has proven particularly damaging for Turkish investors, who have already faced challenges from inadequate domestic trading platforms and various fraud schemes during the ongoing crypto winter. The failure of FTX resulted in significant losses for Turkish citizens, compounding the financial pressures many were already experiencing. Turkey’s status as one of the more crypto-friendly nations meant that FTX had developed a substantial user base in the country, making the exchange’s collapse particularly impactful for local investors.

Turkey’s regulatory approach to cryptocurrency has been evolving, with the government taking significant steps in May 2021 by including cryptocurrency exchanges on the list of organizations governed by the nation’s anti-money laundering and terrorism financing (AML/TF) laws. This move provided MASAK with the legal authority to investigate cryptocurrency exchanges like FTX Turkey and take enforcement action when necessary.

The FTX investigation in Turkey forms part of a broader international effort to untangle the exchange’s collapse. The FTX group of companies is currently under investigation not only in Turkey but also in the United States, the Bahamas—where it maintained its headquarters—and Japan. Authorities in multiple markets have suspended the exchange’s licenses and those of its subsidiaries as the global investigation continues. Recent reports indicate that Sam Bankman-Fried could face extradition from the Bahamas to the United States for questioning, highlighting the international scope of the legal proceedings.

The coordinated international response to FTX’s failure underscores the growing recognition among global regulators that cryptocurrency exchanges require robust oversight. Turkey’s proactive approach in investigating FTX Turkey and seizing connected assets demonstrates the country’s commitment to enforcing its financial regulations, even as it maintains its position as a crypto-friendly jurisdiction. The outcome of these investigations will likely shape future regulatory approaches to cryptocurrency exchanges in Turkey and beyond.