I hope you are all well and having an excellent week, welcome to CryptoGod-1’s blog on all things crypto. Some good news has emerged recently as the founder of the now defunct exchange, Thodex, has been captured and finally brought back to Turkey to face charges.
Thodex Exchange
Now a defunct exchange, Thodex was founded in 2017 by Faruk Fatih Ozer and was the first global exchange based in Turkey. Of the 40 or so cryptocurrencies in Turkey at the time it by far the largest and most popular in operation When it was established there were only three other cryptocurrency exchanges in Turkeys, and they were also the first to install Bitcoin ATM's in the country. In March 2020 the name was changed from Koineks to Thodex, at the same time when the exchange went global. They also got licensed as a Money Service Business by the Financial Crimes Enforcement Network that same year.
It had 391,000 users when it froze in April 2021, the same time when the owner fled Turkey with his client's money. At the same time an unspecified partnership transaction occurred, and on the website Thorex stated it would be shut down for four to five days due to a sale process being underway. Specifically, they stated that some 'big banks' were interested in investing and therefore the exchange would need to shut down while all due diligence was being completed.
In reality, the founder and other higher ups had taken off for Albania with $2B of cryptocurrency in their possession. Users of the platform began to get worried when they could not access their accounts or withdraw their funds, and complaints were filed. This led to the start of an investigation on April 22 by public prosecutors who then determined that users of Thodex could not access their funds and that Ozer had indeed left Turkey. The exchange had its assets frozen and arrest warrants were issued for Ozer and 81 other suspects.
Of the warrants issued, 62 people were detained within Turkey, mainly in Istanbul but the criminals were also located across eight other provinces. According to the lawyer of the platform's victims, Abdullah Usame Ceran, over 400,000 members were registered with Thodex at the time and around 390,000 were active users.
In May 2022 the very first hearing for a victim in the case was heard by the Anatolian Civil Court. They sued Thodex for the taking/using of deposited money contrary to the user agreement, which had been revealed as part of a fraud and tax offence investigation conducted against the exchange after its founder had absconded.
Later in 2022 it was reported that the Public Prosecutor's office had recieved receipts that showed Ozer had compensated some of the victims of the exchange, apparently out of remorse. However, an Interpol Red Notice was put out against him with a warrant for his arrest. Of the others involved who were detained, 21 of the suspects, including Ozer, were indicted for 3 separate crimes and face up to 40,564 year collective prison sentence. The courts had decided that the suspects had converted their clients money into both cryptocurrencies and gold, and had also made use of false advertising to lure in unsuspecting victims to the exchange.
It was announced in August of 2022 that Ozer had been arrested in Albania and was being held there while the process of extraditions was underway. Finally, in April 2023 he was brought back to Turkey, being escorted on a plane from the Albanian capital of Tirana in the morning and landing at Istanbul airport a few hours later. There he was taken into custody by the Istanbul Airport Police Department and is expected to undergo health checks before being taken to the Istanbul Police Department.
Crypto Remains Popular in Turkey
While the fiasco of Thodex shook the nation in terms of their enthusiasm for crypto, there has still been a massive upswing in the popularity of cryptocurrencies and blockchain technologies over the last couple of years. There are supposed to be around 8 million people in the nation who are involved in crypto at some level, either as an investor or working in the sector, according to an estimate done in 2022 by the Turkish crypto exchange Paribu. This in part is possible due to the high levels of inflation in Turkey and the steep devaluation of their national currency, the lira. In October of 2022 the rate of inflation stood at 85.51%.
Its good to see some justice being handed out to these founders of exchanges who decide to pack up and run with their clients funds. Hopefully he will get the sentence he deserves, and although he apparently returned some funds out of remorse and goodwill, it does not change what he did. The more of these crooked exchange founders who get caught, the better, and it should hopefully be a deterrent to others in the future thinking about doing something similar.
Have a great day.
CryptoGod-1.
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