The founder of a collapsed crypto exchange in Turkey has been sentenced to more than 11,000 years in prison for fraud and other crimes. Faruk Fatih Ozer, who ran Thodex until it shut down in 2021, was found guilty by a court in Istanbul on Thursday.
Thodex Scam Left Thousands of Investors in the Lurch
Thodex was one of the largest crypto exchanges in Turkey, with over 400,000 users and a daily trading volume of $585 million. In April 2021, the platform announced that it was suspending operations due to a partnership deal and that users would be able to withdraw their funds after a few days. However, the exchange never resumed its services and Ozer fled to Albania with an estimated $2 billion worth of cryptocurrencies.
Thousands of investors were left unable to access their money and filed complaints against Ozer and his company. The Turkish authorities issued an arrest warrant for Ozer and requested his extradition from Albania. He was brought back to Turkey in June 2021 after a lengthy legal process.
Ozer and His Siblings Convicted of Multiple Charges
Ozer and his two siblings, Güven and Serap Ozer, were charged with leading a criminal organization, aggravated fraud, and money laundering. The court sentenced them to 11,196 years each in prison, according to Bloomberg. The court also ordered them to pay compensation to the victims of the scam.
Ozer denied any wrongdoing and claimed that he was smart enough to lead any institution on Earth. He said that he established Thodex at the age of 22 and that he would not have acted so amateurishly if it were a criminal organization. He also said that he had paid back some of the investors and that he was willing to cooperate with the authorities.
Crypto Regulations in Turkey Remain Unclear
The Thodex case highlighted the lack of clear regulations for the crypto industry in Turkey, where many people turned to digital currencies as a hedge against inflation and currency devaluation. The Turkish government has expressed its intention to regulate the sector and protect investors from fraud and volatility.
However, the legal framework for crypto activities remains unclear and inconsistent. In April 2021, the central bank banned the use of cryptocurrencies as a means of payment, citing security and stability risks. In May 2021, the finance ministry announced that it was working on a draft bill to regulate crypto exchanges and require them to obtain licenses from the Capital Markets Board. However, the bill has not been finalized or submitted to the parliament yet.
The crypto community in Turkey has urged the authorities to adopt a more supportive and transparent approach to the industry, rather than imposing strict restrictions or bans. They have also called for more education and awareness campaigns to help investors make informed decisions and avoid scams.