Cryptocurrency: Thodex Exchange CEO Runs Off With $2B

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Sun Apr 25 15:57:52 PDT 2021

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Dozens Arrested After CEO Of Turkish Crypto Exchange Flees With $2 Billion

Turkish authorities have detained 62 people over alleged links to the
Istanbul-based cryptocurrency exchange Thodex after its founder fled
with a reported $2 billion in investors' assets, Turkish media
reported. The suspects were apprehended in raids carried out in eight
cities including Istanbul, Anadolu Agency reported on Friday. Police
issued arrest warrants for 16 other people.

The arrests come after nearly 400,000 users of a Turkish
cryptocurrency exchange were left out of their accounts without being
able to withdraw their funds. The platform’s website has been down for
several days, while reports suggest its CEO has already fled the
country with up to $2 billion.

Bloomberg reported that Thodex, a Turkey-based crypto exchange, has
ceased trading, citing an “unspecified partnership transaction.” The
trading platform, founded in 2017, issued a statement explaining that
all services will remain shut down for about five working days.
However, the message reassured customers that they shouldn’t worry
about their funds. In retrospect, they should.

Approximately at the same time, though, users started to complain
about their inability to access their own assets. As Crypto Potato
notes, some took it to Twitter to complain about losing much of their
net worth.

    A local #Crypto exchange where I'd ~20% of my entire trading
capital got rug pulled

    -20 days no withdrawal (fiat & crypto)
    -Then the website went offline
    -Then the CEO run abroad

    I'm not broke, but it hurts... Alot

    It sucks, Even when u deal with regulated exchanges#Thodex
    — Feras_Crypto (will Never DM you First) (@FeraSY1) April 21, 2021

He wasn't alone: on Thursday, hundreds of thousands of users were
unable to get access to their digital wallets.

"We have started the legal procedures and lodged a complaint at the
prosecutor's office," a lawyer for some investors said. Prosecutors
were investigating the businessman on charges of "aggravated fraud and
founding a criminal organisation".

    — THODEX (@thodexofficial) April 22, 2021

According to subsequent coverage the exchange’s chief executive
officer and founder, Faruk Fatih Ozer had fled the country.

Following news of Ozer’s alleged escape from Turkey, users of the
local exchange hired a law firm to file a complaint against Thodex.
Oguz Evren Kilic, representing an unspecified number of Thodex
customers, confirmed the development, saying, “we have filed a legal
complaint on Wednesday.”

He speculated that the funds on the Turkish exchange could be worth
“hundreds of millions of dollars,” as the exchange had 391,000  users.
According to another report, Thodex’s CEO and founder has run away in
Thailand with an estimated amount of roughly $2 billion.

Overnight, Turkish security officials released a photo of Thodex
founder Faruk Fatih Ozer going through passport control at Istanbul
Airport on his way to Albania.
Turkish security officials released a photo of Thodex founder Faruk
Fatih Ozer going through passport control at Istanbul airport on April
22, 2021.

On Friday, Interior Minister Suleyman Soylu made a phone call to his
Albanian counterpart to request Ozer be captured and repatriated.

At the same time, Turkish police raided the company's headquarters on
the Asian side of Istanbul and seized computers and digital materials,
press reports revealed. Turkish authorities also started procedures to
issue an international warrant to arrest and extradite the missing
founder of a cryptocurrency exchange, Anadolu Agency reported.

In a message on the company's Twitter account, Ozer said he was abroad
for meetings with foreign investors and would return home "in a few
days and cooperate with judicial authorities so that the truth can
come out". Subsequent updates indicated that this was a lie.

In recent months, a growing numbers of Turks turned to cryptocurrency
in a bid to shield their savings in the face of a sharp decline in the
value of the Turkish lira and high inflation. The Turkish crypto
market remains unregulated despite growing scepticism from President
Recep Tayyip Erdogan's government about its safety.

Last week, Turkish authorities took a step to regulating  the
cryptocurrency industry, and as we reported last week, Turkey
officially banned users from using cryptos as payment instruments
starting April 30th.

The government spent a massive $165 billion in foreign-exchange
reserves over the past two years, effectively leaving its central bank
without reserves Erdogan revealed on Wednesday, part of a futile
effort to prop up the national currency. Concern about the country’s
dwindling foreign-exchange reserves, which are negative when money
borrowed by the government from private banks via swap agreements are
factored in, has fueled concern about both lira and dollar deposits --
and pushed savers into alternative investment vehicles.

Last Friday, the volume of trade in Turkish crypto markets tripled to
over $1.2 billion from a week earlier, according to data published by, which tracks data on price, volume and market value on
crypto markets. That compares with an average daily trading volume in
the Turkish stock market’s benchmark index of about $3.1 billion.

“One can establish a crypto exchange with just 50,000 liras (about
$6,000) in capital,” Oguz Evren Kilic, a lawyer representing Thodex
users, said by phone. “There’s a huge regulatory gap in this field.”

Meanwhile, as Bloomberg reports, last month Thodex initiated a
campaign to boost membership by offering millions of free Dogecoins to
new registrants. Its website says 4 million of the coins were
distributed, though many people have taken to social media to complain
they never received them.

In the latest development in this bizarre saga, in a statement
published from an unknown location, Thodex CEO Faruk Fatih Ozer
promised to repay investors and to return to Turkey to face justice
after he did.

“I was born as one of the three siblings of a civil servant,” Ozer
said in his statement, adding that he’s a high-school dropout. As the
company ran into financial trouble, he said he thought about either
committing suicide or giving himself up to authorities, but both of
those options meant clients’ assets would never be retrieved.

“So I decided to stay alive and fight, work and repay my debts to
you,” he said. “The day I repay all my debt, I will return to my
country and give myself in to justice.”

Narrator:  "he won't return."

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