Turkey investment fund crisis wipes $30 billion from markets

Turkey is facing a major financial crisis following the collapse of several investment funds, which reportedly wiped approximately $30 billion from the market in just two days. The crisis involves allegations of Ponzi-like schemes and market manipulation, particularly concerning funds that reported extraordinary returns through low-circulation stocks.

Regulatory authorities have moved to liquidate 131 investment funds, which hold an estimated $18 billion in assets. This development has left at least 450,000 investors uncertain about the recovery of their funds. Law enforcement has detained several financial executives, including the Chairman of Tera, on suspicion of market fraud, and has frozen various assets.

The crisis follows warnings from Treasury and Finance Minister Mehmet Şimşek regarding suspicious market activities. The Capital Markets Board (SPK) had previously adjusted valuation methods and rules regarding fund concentration in low-circulation stocks to prevent fictitious valuations. Prior to the full collapse, a group of approximately 15,000 investors managed to exit their positions, totaling roughly 132.7 billion lira, just before the market downturn.