Thodex Founder Arrested by Turkey Police in Albania

Albania police officers have arrested the founder of cryptocurrency exchange Thodex, who had fled Turkey and left investors’ funds irretrievable, the Turkish Interior Ministry announced on Tuesday.

Albania’s Internal Affairs Minister Bledar Cuci informed his Turkish counterpart Suleyman Soylu that Faruk Fatih Ozer was caught in Vlore, a major city in the Republic of Albania, and his identity was confirmed by biometric results.

Albania police informed the Turkish interior minister “that the founder of Thodex, the fugitive Faruk Fatih Ozer, wanted with a red notice (by Interpol), was arrested in Vlora, Albania,” the Turkish Interior Ministry mentioned in a statement.

The ministry added that “extradition procedures to Turkey have been initiated.”

Ozer will be charged with accounts of fraud and founding a criminal organization.

Investors Fell into Scam

In April last year, Thodex, a cryptocurrency exchange based in Turkey, went offline and its CEO was reportedly gone missing, leaving thousands of investors worried that their funds had been stolen.

The founder of the crypto exchange was suspected of having fled Turkey with the assets of his clients. Turkey police eventually issued an international arrest warrant for fugitive businessman Faruk Fatih Ozer, who fled with a reported $2 billion in investors’ assets.

Before the escape, Thodex said its platform had been temporarily closed to address an abnormal fluctuation in the company accounts.

Local media reports indicated that Thodex’s founder took a flight to Albania, taking $2 billion of investors’ funds with him. Turkish security officials then released a photo of what they said was Ozer leaving Istanbul Airport.

During its business operations, Thodex launched aggressive campaigns to lure investors. The platform had first pledged to distribute luxury cars to customers through a flashy advertising campaign featuring famous Turkish models.

Faruk Fatih Özer’s exchange suddenly went offline while holding at least $2 billion from almost 400,000 investors.

Turkish authorities issued an international warrant seeking Ozer’s arrest. Police eventually arrested 62 people linked to the firm in eight cities including Istanbul.

Thousands of Thodex users filed complaints against the firm, with investors saying they were unable to access their accounts and that their savings were irretrievable.

Some Turkish citizens had turned to cryptocurrency as a way to protect their savings from rising inflation and the weakening of the Turkish lira.

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Albania to Begin Levying Crypto Tax Next Year, Report says

Southern European country Albania is reportedly on track to begin taxing digital currency earnings as of 2023. (47).jpg

According to the local news platform Exit News, the taxation move is predicated on a new draft law on income tax by the country’s parliaments. This draft law has provided a lot of clarity to some of the grey areas in the digital currency ecosystem in the country, including the definition of what a “virtual asset” is, as well as “cryptocurrency mining”.

On virtual currency, the new draft laws noted them to be “a digital representation of a value that can be deposited, traded or transferred in digital form, and that can be used for payment or investment purposes or as a medium of exchange, including but not limited to cryptocurrencies,” with the definition excluding Central Bank Digital Currencies (CBDCs).

Per the new laws, individuals and enterprises will be taxed accordingly to reflect their relative investment and income in the digital currency ecosystem. While individual miners are billed to be charged a capital gain tax of 15%, more organized and corporate Bitcoin mining farms will be required to pay a business tax which is often customized to fit the business profile. 

While there have been a lot of raised eyebrows with Albania’s approach to monetary policies in general, the country did not have a very high ranking with MONEYVAL, the European Union Committee of Experts on the Evaluation of Anti-Money Laundering Measures, and the Financing of Terrorism. The regulator noted that Albania has not significantly put measures to combat money laundering, a weakness that may be exploited should the country become a safe haven for crypto-related money laundering.

Taxation has remained a very vital subject in the emerging cryptocurrency industry. Besides Albania, countries like India, Norway, and the United States of America are notably taking this very seriously. Should the Albanian Financial Supervisory Authority (AFSA) be in tune with the parliament in signing this crypto bill, it will come into effect by 2023.

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