Kavcioglu said he stepped down to limit damage to the institution amid “recent allegations concerning” the regulator and himself. I have asked President Recep Tayyip Erdogan to relieve me of my duties to prevent further damage to our institution
, he wrote on X.
The resignation follows a week of mounting scrutiny after the collapse of investment funds that trapped hundreds of thousands of retail investors. Criminal investigations now reach senior officials across the financial sector.
Accusations From Inside Erdogan’s Own Party
The pressure on Kavcioglu became public on , when Savci Sayan, a member of the ruling Justice and Development Party (AKP), asked on X whether Kavcioglu had sought bribes from some of the fund managers involved. Kavcioglu denied the claim to the Turkish press and said the BDDK has nothing to do with the scandal. Sozcu, an opposition-aligned newspaper, also quoted him denying widely reported claims that he had money in the funds under investigation or took bribes.
That the attack came from within Erdogan’s own party points to a deepening argument over who answers for regulatory failures. Meanwhile, the investigation has moved quickly:
- Senior BDDK officials were detained over the weekend and jailed pending trial in a probe of capital markets transactions involving the funds
- At least 123 people have been remanded in custody
- Prosecutors have widened their focus beyond fund managers to include central regulators and clearing-house executives
Nine Months Between the Warning and the Crackdown
On , Turkey’s Capital Markets Board (SPK) ordered the liquidation of 131 funds run by seven Istanbul-based portfolio companies. The order froze accounts for 455,758 retail investors and roughly $20 billion in assets.
The funds had built up more than $20 billion in just three years, drawing investors, including politicians, former officials and celebrities, who wanted returns that could outrun inflation and a weakening lira. Tera’s assets under management grew roughly ten-fold to $14.3 billion by late August 2026, while Pusula grew thirteen-fold to $13.2 billion over the same period.
Fund managers bought low-float, illiquid listed stocks with retail money, reported phantom net asset values, and wired proceeds abroad before the SPK acted.
The regulator’s own account of the timing is what keeps the damage growing. The SPK acknowledges that the problematic fund behavior was identified in late 2025 and discussed by the Financial Stability Committee on . The final fund guideline did not appear until , with mass intervention following on 17 September.
Kavcioglu’s departure makes him the highest-level regulatory casualty so far, though investigators are still building cases against dozens of financial executives and fund operators. It also leaves open whether the BDDK itself had supervisory obligations over fund custody arrangements and the banking relationships that let the schemes scale.
Hashlytics Take
A resignation is the cheapest form of accountability on offer, and it answers the wrong question. Whether Kavcioglu took anything is a matter for prosecutors. What the public record already shows is a gap of more than nine months between a regulator identifying the problem and anything binding being put in place, during which funds that valued themselves using illiquid, thinly traded stocks kept collecting retail money. A fund whose reported value depends on prices its own manager can move is a supervision problem before it is a fraud problem, and the open question about who watched custody and bank relationships is where this story will be decided, not in who leaves the BDDK next.
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