Turkey seeks arrest of missing crypto boss over huge fraud
Police on April 23 arrested 62 suspects in Turkey as a part of an investigation into a cryptocurrency exchange platform, Thodex, the website of which is currently inaccessible, according to security sources.
The Chief Public Prosecutor’s Office issued detention warrants for 78 suspects over their alleged links to Thodex, the source said on condition of anonymity due to restrictions on speaking to the media.
While police teams carried out simultaneous raids in eight different provinces to nab 62 out of a total of 78 suspects, efforts are underway to arrest the remaining suspects.
Also, a large number of digital materials and documents were seized during the operations.
The Justice Ministry has separately initiated legal action against Fatih Faruk Özer for the search with the red notice and for his repatriation from Albania.
The Turkish Interior Ministry confirmed on April 22 that Özer had left the country for Albania. Interior Minister Süleyman Soylu spoke by phone with his Albanian counterpart about the case, state-run Anadolu Agency reported.
Earlier, the Istanbul Chief Public Prosecutor’s Office appealed to Thodex staff for their testimonies on the platform, which has allegedly upset hundreds of thousands of members.
Abdullah Usame Ceran, a lawyer, filed a criminal complaint against Özer, the founder and CEO of the platform, alleging “aggravated fraud.”
After some transaction issues, the platform had shared releases on April 19 and April 20, announcing a six-hour maintenance period.
On April 21, the platform made another announcement, saying it would enter an international partnership and that members would be able to make transactions again after a five-day maintenance period.
Meanwhile, Turkey’s financial crimes watchdog announced that it had blocked all of the platform’s bank accounts in the country as of April 21.
Turkey’s Financial Crimes Investigation Board (MASAK) initiated an investigation into the person in charge and the company.
Media reports said the exchange shut down while holding at least $2 billion from 391,000 investors.
An Ankara-based lawyer for some of the investors, Oğuz Evren Kılıç, said on April 23 that the investigation into Thodex “is deepening.”
“Hundreds of thousands of users cannot get access to their digital wallets. The situation will get more serious unless a concrete step is taken” by Thodex, he told AFP by phone.
The 24-hour trading volume on Thodex was $538 million on its last trading day, according to Coinmarketcap. Daily trading volume on Thodex tripled to over $1.2 billion on April 16 from a week earlier, according to data published by coingecko.com.
In a statement on the platform’s Twitter account, Özer denied all allegations.
“I have left the country on April 19 to make final negotiations with the investors,” he said.
The company suffered a loss of 25 million Turkish Liras [currently $3 million] caused by a cyberattack in 2017, he added.
He pledged to pay roughly 30,000 users, whose subscription accounts were flawed, their money back over time.
The statement also said that the market capitalization of Thodex was around $40 million and that media reports about missing $2 billion were “irrational and unreasonable.”
Founded in 2017, Thodex launched aggressive campaigns to lure investors. It had first pledged to distribute luxury cars through a flashy advertising campaign featuring famous Turkish models. The platform then launched its Dogecoin drive, in which it sold the cryptocurrency coins at a big rebate but did not allow investors to sell.
Turkey’s crypto market has gained momentum in recent months as investors joined the global rally in Bitcoin, seeking to hedge against the Turkish Lira depreciation and inflation that topped 16 percent last month.
Crypto trading volumes in Turkey hit 218 billion liras ($27 billion) from early February to March 24, up from just over 7 billion liras in the same period a year earlier, according to data from U.S. researcher Chainalysis analyzed by Reuters.
The Turkish crypto market remains unregulated despite growing skepticism from the government about the safety and use of digital currencies. There are around 40 cryptocurrency exchange platforms operating in Turkey.
Last week, the Turkish Central Bank decided to ban the use of cryptocurrencies in payments for goods and services starting from April 30. It warned that cryptos “entail significant risks” because the market is volatile and lacks oversight.