Crypto Exchange Thodex Founder Sentenced to Over 11,000 Years Amid Fraud Allegations

In a decision by the Anatolian 9th High Criminal Court, Faruk Fatih Özer, the mastermind behind the Turkish cryptocurrency platform Thodex, has been found guilty in a significant fraud case. Alongside Özer, six other individuals were detained, making up a total of 21 individuals implicated in the fraud allegations.

The court’s judgment was severe. Özer, together with his siblings, Güven Özer and Serap Özer, received a staggering sentence of 11,190 years and 6 months imprisonment. The charges that led to this lengthy sentence encompassed “establishing, directing, and participating in a criminal organization,” “engaging in sophisticated fraud,” and “money laundering.”

In addition to this, the court mandated an extra sentence of 6 years, 4 months, and 15 days for each sibling. They were also slapped with a hefty fine of 135 million lira for “committing fraud using digital systems.” In total, the cumulative sentence for each of the Özer siblings stands at 11,196 years, 10 months, and 15 days.

Thodex, which was once a beacon in Turkey’s cryptocurrency landscape, took an unexpected turn in 2021 when it suddenly halted all operations. This abrupt closure left numerous users in a quandary, unable to access their digital assets, which were estimated to be worth around $2 billion.

The situation became murkier when Özer departed Turkey post the shutdown, sparking rumors of a potential exit scam. Despite the swirling allegations, Özer remained steadfast in his denials.

In the courtroom, Özer presented a defense centered on the premise that Thodex was simply a business venture that unfortunately went under. He asserted, “I possess the acumen to oversee any global institution. My capabilities are evident from the enterprise I initiated at a mere age of 22. Had I intended to create a criminal syndicate, my actions would have been far more sophisticated.”

The Anadolu Chief Public Prosecutor’s Office, in its indictment, shed light on the deceptive practices of the Thodex platform. The document revealed that a sum equivalent to 253 million 714 thousand 909 lira in cryptocurrency was moved from three distinct accounts under the control of Özer. Intriguingly, a large chunk of these digital assets found their way to cryptocurrency wallets based in Malta.

The saga took another twist when Özer was captured in Albania on August 30, 2022. Following legal procedures, he was extradited to Turkey by April 20, 2023, and by April 23, he was under detention at the Anadolu Justice Palace.

This case has garnered extensive coverage from global media powerhouses like Cointelegraph and Fortune. Their reports underscore the pivotal nature of the Thodex case in the realm of cryptocurrency and highlight the broader ramifications it holds for the regulation of digital assets and safeguarding investor interests.

Disclaimer & Copyright Notice: The content of this article is for informational purposes only and is not intended as financial advice. Always consult with a professional before making any financial decisions. This material is the exclusive property of Blockchain.News. Unauthorized use, duplication, or distribution without express permission is prohibited. Proper credit and direction to the original content are required for any permitted use.

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Turkish Crypto Exchange Founder Arrested

The founder of Turkish cryptocurrency exchange, Thodex, Faruk Fatih Ozer, has finally been arrested after two years on the run. Ozer was detained by the Istanbul Airport Police Department on April 20, following his arrival at Istanbul Airport from the Albanian capital of Tirana. The 27-year-old is facing charges of fraud and money laundering relating to allegations of an exit scam involving at least $2 billion worth of cryptocurrency stolen from Thodex.

The saga of the Thodex exchange began on April 22, 2021, when the platform abruptly halted trading and withdrawals amid reports of police raids at its offices. Local publications speculated that the suspension was part of an exit scam involving Ozer, who was alleged to have fled Turkey with the stolen cryptocurrency. Interpol subsequently issued a red notice for Ozer, who reportedly ran to Albania.

About a year after Thodex collapsed, Ozer was arrested in Albania in August 2022, and Turkish authorities issued a warrant for his extradition. After several months of legal proceedings, Ozer was finally extradited to Turkey to face charges. The detained founder is expected to undergo health check-ups and then will be taken to the Istanbul Police Department for questioning.

Following the collapse of Thodex, Turkish police detained 62 people over alleged involvement in the exit scam, including some of the then-missing CEO’s siblings. The detainees were charged with fraud, money laundering, and membership of a criminal organization. Turkish authorities have been working with international law enforcement agencies to track down the missing funds, which have been reported to be in various cryptocurrency accounts and exchanges.

The Thodex saga highlights the risks associated with investing in unregulated cryptocurrencies, particularly in countries where the legal and regulatory framework is still evolving. The collapse of Thodex and the subsequent arrest of Ozer has sparked a debate in Turkey about the need for greater oversight and regulation of the cryptocurrency industry. The Turkish government is reportedly working on a new regulatory framework for cryptocurrencies, which is expected to be unveiled later this year.

In conclusion, the arrest of Thodex founder Faruk Fatih Ozer marks a significant development in the ongoing investigation into the alleged exit scam involving the Turkish cryptocurrency exchange. While the recovery of the stolen funds remains a challenging task, the arrest of Ozer sends a strong message to other would-be cryptocurrency fraudsters that they cannot evade justice indefinitely.


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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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$7,700,000,000 Worth of Crypto Taken From Victims Through Scams in 2021: Chainalysis

Scammers have conned more than $7.7 billion worth of digital assets from investors in 2021, partly due to the emergence of a new kind of grift in the crypto world, according to Chainalysis.

The analytics firm notes in a new Crypto Crime Report that “rug pulls” are one of the big reasons why scams have skyrocketed by 81% in value this year compared to 2020.

Rug pulls generally refer to when developers promote a new cryptocurrency project to investors and sell affiliated tokens, then withdraw the funds raised during the token sales and disappear.

Chainalysis explains,

“Rug pulls have emerged as the go-to scam of the DeFi (decentralized finance) ecosystem, accounting for 37% of all cryptocurrency scam revenue in 2021, versus just 1% in 2020. All in all, rug pulls took in more than $2.8 billion worth of cryptocurrency from victims in 2021.”

While rug pulls usually involve purported decentralized finance (DeFi) projects, that’s not always the case. Back in April, Turkish centralized exchange Thodex conducted the largest rug pull of the year after it stopped allowing users to withdraw their funds.

Source: Chainalysis

Thodex CEO Faruk Fatih Ozer disappeared shortly after halting withdrawals, and the exchange’s users lost more than $2 billion worth of crypto – a haul accounting for nearly 90% of funds stolen in rug pulls this year.

Chainalysis notes that scamming is the biggest form of crypto-based crime, and argues that it represents “one of the biggest threats to cryptocurrency’s continued adoption.”

Read the analytic firm’s full report here.

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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Six Jailed in Connection With Thodex Fraud Case

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Turkish Court Jails Suspects In Thodex Cryptocurrency Exchange Probe

According to a recent report from Reuters, a Turkish court has jailed six suspects as part of its investigation into local cryptocurrency exchange Thodex. The group of suspects, who are reportedly being held pending trial, include the brother and sister of Thodex CEO Faruk Fatih Ozer, as well as senior company employees.

Ozer fled Turkey earlier this month, leaving the funds of about 390,000 users of the exchange irretrievable. Bitcoin accounted for 1.73% of Thodex’s total volume at the time, more than $10 million worth. Thodex and Ozer cited liquidity problems, a years-old hacking incident and the inability to transfer shares to an outside investor as reasons for the apparent exit scam.

“At least 83 people were detained over the past week as users of the platform said the company scammed them and blocked access to accounts and money withdrawals,” Reuters reported. “Most of those detained over the past week have been released. Others, including seven on Thursday, were let go with judicial control measures.”

The Turkish government is also reportedly exploring the idea of establishing a central custodian bank for cryptocurrency exchanges following the issues with Thodex, as well as the local cryptocurrency exchange Vebitcoin. Turkish authorities reportedly arrested four employees of Vebitcoin earlier this week.

The Turkish government instituted a ban on cryptocurrency payments earlier this month as well, as its own fiat currency is rapidly being devalued.

Though it is not possible for a government to outright ban a decentralized financial system like Bitcoin, it can make it difficult for citizens to leverage, particularly by instituting restrictions on payments services and bitcoin exchanges. While the reported actions of Ozer and the operators of Vebitcoin appear to justify regulatory action, forthcoming government restrictions or custody requirements for Bitcoin could oppress what is meant to be a sovereign route to financial security for Turkey’s citizens.


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Turkish Central Bank Considers Becoming Bitcoin Custodian

Turkey’s fiat currency, the Lira (TRY), is in serious trouble – especially against Bitcoin – with consumer price inflation reaching an alarming 16% in March of this year. In January of 2008, the Lira traded at near-parity with the US Dollar but is currently near its all time low of 8.5 TRY to the USD.

Perhaps in response to the surging demand for reliable hard money alternatives like Bitcoin, the Turkish central bank, the CBRT, banned cryptocurrency as a payment method for goods and services in mid-April of this year.

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The Plan

The subsequent failure of two Turkish crypto exchanges, Thodex and Vebitcoin, was perhaps a fairly predictable consequence of the harsh and sweeping new restrictions. While the CBRT’s governor has denied any blanket ban of crypto, according to a report published on Bloomberg and attributed to a senior government official, the CBRT is now planning to aggressively regulate the Turkish crypto industry. Much of the proposed regulation appears designed to prevent further exchange failures.

Related Reading | Bitcoin Loses Important Lifeline That Got Bulls Blood Pumping

Specifically, the CBRT would reportedly create a new custodial bank, intended to hold the crypto funds of local crypto exchanges and possibly other crypto companies taking user deposits. Most likely, to avoid operational disruption, the proposed bank would maintain only the companys’ cold wallets while allowing them to operate their own hot wallets.

This plan would prevent any re-occurrence of the Thodex exit scam incident, in which the company’s founder fled the country with $2 billion in user deposits… Unless a bad actor at the custodial bank enacts a similar crime. Or the bank gets hacked. Or the government shuts it all down.

The Flaws

It should be clear that the CBRT’s claim that the custodial bank will “eliminate counterparty risk” is inaccurate – the most it will achieve is to transfer counterparty risk from multiple private entities to a single public one. In effect, this custodial bank would take unto itself the responsibility of managing all crypto exchange deposits within the country. It can be hoped the CBRT will only employ trustworthy individuals and implement solid security measures.

Related Reading | Potential Island Reversal Leaves Bitcoin Bulls Stranded

The CBRT is also considering applying a capital threshold rule for exchanges, designed to ensure such companies are sufficiently well-capitalized. This measure would require a high degree of accounting transparency between crypto exchanges and the CBRT, in order to monitor all relevant crypto and fiat balances. The compliance costs of such regulation would likely drive up fees on Turkish exchanges but could help to prevent any repeat of the Vebitcoin collapse, which has been attributed to fraud.

The Consequences

If realized, this plan would represent the first time that a national central bank directly controls the crypto funds of its local industry. Whereas its now common practice around the world for exchanges to comply with banking-style regulations and report user information and balances, having the financial authority itself hold the private keys is a new level of centralized control. The possibility for an embarrassing failure exists, if the custodial bank were to fail or be breached. Given Turkey’s current monetary difficulties, the seizure of its citizens’ crypto funds is another potential risk. Turkish users would be well-advised to keep this maxim in mind: not your keys, not your bitcoin.

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Crypto Scam, Frozen Assets and Missing CEO Lead to Raids in Turkey

Reports indicate that a Turkish crypto exchange used the popular cryptocurrency Dogecoin as bait to lure investors into a fraudulent scheme.

The Agence-France Presse (AFP) reports that the Istanbul-based cryptocurrency exchange Thodex ran a Dogecoin promotional campaign where it sold the meme cryptocurrency at a quarter of its market price.


However, investors and traders were subsequently unable to withdraw or convert their Dogecoin into other digital assets. The Turkish cryptocurrency exchange is now allegedly holding around $2 billion of investor funds and its CEO, Faruk Faith Ozer, has reportedly fled Turkey.

According to the AFP,

“Turkish authorities on Friday started procedures to issue an international warrant to arrest and extradite the missing founder of a cryptocurrency exchange, state media reported.

Thodex founder Faruk Fatih Ozer fled, officials said, to the Albanian capital of Tirana with a reported $2 billion in investors’ assets.”

A photo of Ozer slipping through passport control at Istanbul Airport, presumably en route to an undisclosed location, was circulated by Turkish authorities. While Ozer has yet to be apprehended, 62 other people believed to be affiliated with Thodex were taken into custody in raids on Friday, according to the Anadolu news agency. The police also issued arrest warrants for 16 others and have issued an international arrest warrant for Ozer.

Thodex’s drive to sell Dogecoin at a 75% discount coincided with the memecoin breaking into the top ten cryptocurrencies by market cap. During the period between the start of the year and earlier this week when Dogecoin hit a record high, the memecoin has surged by over 8,000%.

The most heavily traded pair on Thodex in the 24 hours prior to the exchange’s abrupt suspension of operations was Dogecoin, with the memecoin posting volumes of slightly over $300 million.

In a statement, Thodex disputes the figures of $2 billion of investor funds from about 391,000 investors being lost or stolen. Instead, the Turkish exchange reports that it has 700,000 users and only 30,000 of them have encountered a “suspicious situation.”

“The allegations that I lost about 391,000 people with a loss of about $2 billion USD, which was reflected to the public on April 22, 2021, are unfounded.

“Firstly, according to our preliminary findings, only about 30,000 of our nearly 700,000 users have a suspicious situation…”

Among the cryptocurrency exchanges that CoinMarketCap has assigned an exchange score, Thodex currently has a score of 0.9 out of a possible 10 points. Exchanges such as Binance, Coinbase Pro and Huobi Global have scores of 9.7, 8.6 and 8.6 respectively.


Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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Turkish Crypto Exchange Thodex Charged With $2 Billion Fraud

Key Takeaways

  • The CEO of one of the largest crypto exchanges in Turkey Theodex is under criminal investigation.
  • The complaint alleges that the CEO had run away with customers’ funds totaling over 2 billion.
  • Turkish Police has detained 62 people linked with the exchange and issued detention warrants for 16 more persons.

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After initial reports of a “Turkish Mt. Gox” event, Thodex is now officially under criminal investigation for fraudulent activity totaling more than $2 billion.

Thodex CEO Denies Allegations

According to a report by a Turkish news agency, a criminal complaint was filed against Thodex’s 27-year-old CEO, Faruk Fatih Ozer. The complaint alleges that the CEO absconded with customers’ funds totaling over $2 billion.

Ozer has denied the allegations on his now-deleted Twitter account, claiming he was at a business meeting in Albania.

On Apr. 21, Thodex abruptly shut down all trading and fund withdrawals, blocked 391,000 users from accessing their funds.

Meanwhile, the Turkish Police have detained 62 people linked with the exchange and issued detention warrants for 16 others. The Financial Crimes Investigation Board (MASAK) is also investigating the fraud and has frozen all bank accounts linked with the exchange.

When its operations were halted, Thodex’s volume was about $ 585,513,644, as per data from CoinMarketCap.

As one of the country’s leading exchanges, Thodex has offered a convenient platform for investors looking to escape fast-rising inflation. After its national currency, the lira, dropped more than 50% in value since August 2018, Turkish citizens flocked to Bitcoin as a safe-haven asset.

The rate remains high, however. The lira battled a 16% inflation as of March 2021.

TRY-USD Price Chart
Turkish Lira against the U.S. Dollar since May 2017. Source: Trading View

Crypto trading volumes in Turkey for February and March were recorded above $26 billion.

Nevertheless, the government has expressed opposition to the asset class, claiming “irreparable” damage and economic risks. Events like that of Thodex only strengthen the government’s views.

This opposition has manifested itself in a law which bans the use of cryptocurrencies as payments. It goes into effect on Apr. 30.

Disclosure: The author does not hold the cryptocurrency mentioned in this article at the time of publication.

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CEO Of Turkish Exchange Thodex Flees Country, Leaves User Funds Irretrievable

The CEO of Turkish cryptocurrency exchange Thodex, Faruk Fatih Ozer, has fled the country after failing to transfer his shares to another investor, leaving “the remaining assets of about 390,000 active users ‘irretrievable,’” according to a report by Bloomberg.

Thodex’s lawyer, Bedirhan Oguz Basibuyuk, said the CEO fled Turkey because he would have been “either arrested or committed suicide” otherwise. Basibuyuk also explained that there was a liquidity problem with the exchange, explaining by phone that “[there] was a decline in Thodex’s assets. When too many users demanded their money back, the company was unable to meet those,” per the report.

A statement from Ozer on Thodex’s website also indicated that a years-old “hacking incident” has caused the financial problem.

“From today on, my sole aim is to repay my debt to you,” Ozer said in a statement addressed to the exchange’s users, according to Bloomberg. “The day I repay all my debt, I will return to my country and give myself in to justice.”

The news comes after the exchange announced on Twitter that it had abruptly halted trading because the transfer of the shares to an outside investor could not be completed, according to a previous report from Bloomberg. Services would be shut for five working days, but users wouldn’t need to worry about their funds, the announcement said.

Thodex’s bitcoin trading volume only represents 1.73% of its total volume, according to CoinMarketCap, which would be about $10,129,386 worth. Dogecoin leads, representing a whopping 52.39% of the total trading volume. In mid-March, Thodex announced a sogecoin campaign, “saying it would distribute millions of Dogecoins to new registrants … though many people have taken to social media to complain they never received them,” according to Bloomberg.

Although the Turkish central bank banned the use of cryptocurrencies for payments earlier in April, claiming excessive volatility and dangerous lack of regulation, exchanges could still operate. The ban seeks to specifically halt usage of bitcoin for payments, to protect the Turkish lira, and still allows Turks to buy bitcoin as an investment.

After this incident with Thodex, however, the future of bitcoin exchanges in the country is less certain.


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