Turkish Authorities Arrest 62 People in Connection with Exchange Fraud

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In Brief
  • 62 people have been detained in connection with fraud complaints at Thodex.

  • A further 16 people remain at large, with warrants issued for their arrest.

  • Thodex's founder Faruk Fatih Özer has gone into hiding, with an estimated $2 billion in stolen funds.

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Authorities in Turkey arrested 62 people in connection with fraudulent dealings on the Turkish bitcoin exchange, Thodex.

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These arrests are in response to a number fraud complaints filed against the exchange. Users began submitting complaints when they found they were unable to withdraw funds.

As a result, authorities arrested suspects across eight provinces in Turkey. This includes Istanbul, the location of Thodex’s headquarters. Warrants for a further 16 people have also been issued.

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Thodex CEO flees to Albania

Meanwhile, Thodex’s Founder and CEO, Faruk Fatih Özer, fled the country, taking $2 billion worth of his users’ money with him.

Turkish authorities believe that the 27-year-old flew to the Albanian capital of Tiranë. He has also since deleted his public Twitter account.

However, before disappearing he issued a public message from a hidden location, promising to repay the investors’ stolen money.

While the probe is ongoing, Turkey’s financial crimes watchdog froze the exchange’s accounts. The Turkish police searched the exchange’s base in Istanbul on Thursday April 22.

Turkey’s Ministry of Justice also began the process of finding Özer with a wanted person “red notice” and is asking for his extradition from Albania, according to Turkish news agency Anadolu.

Users told lack of access due to new partnership

Nearly 400,000 Thodex users have been unable access or withdraw funds from the exchange since Wednesday April 21.

Login attempts were met with error messages. In a tweet, the exchange explained that the issue was because of a partnership offer that needed evaluating before transactions could resume. They assured their users that normal operations would be back after five working days.

The crypto ban in Turkey

These arrest come after the central bank of Turkey’s decision to outlaw cryptocurrency payments has already resulted in a number of knock-on effects. Immediately following the decision, bitcoin (BTC) and Ether (ETH) showed dips of 3%.

The bank’s decision came during a boom in digital asset usage. Many were turning to cryptocurrencies instead of the Turkish lira, following a severe decline in the fiat currency’s value. The country has seen a rise in interest and inflation rates as well.

The ban on cryptocurrency will come into effect on April 30, 2021.

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Dale Hurst is a journalist, presenter, and novelist. Before joining the Be In Crypto team, he was an editor and senior journalist at a news, lifestyle and human-interest magazine in the UK. Cryptocurrency was one of the first subjects he specialized in when first going freelance in 2018, reviewing exchanges and analysing lawsuits.

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