Thodex CEO Faruk Özer receives 11,196 years jail sentence
In a landmark ruling, Faruk Fatih Özer, the founder of collapsed Turkish cryptocurrency exchange Thodex, has been sentenced to 11,196 years, 10 months, and 15 days for fraud, money laundering, and other charges. This is one of the most severe sentences ever imposed in Turkey for financial crimes. The exchange's collapse in April 2021 deprived over 390,000 people of their funds, with losses estimated at $2 billion. An Istanbul court sentenced Özer and his two siblings to similar-length prison sentences.
Trading halt and the manhunt for Özer
Özer founded Thodex in 2017. The now-defunct exchange became a major player in Turkey's crypto landscape. However, in April 2021, it halted trading/withdrawals abruptly, leading to its collapse. Özer fled the country shortly after, sparking international manhunt. He was eventually apprehended in Albania in August 2022, and extradited back to Turkey in May 2023. Besides, Özer and his siblings, the investigation also implicated four senior Thodex employees and led to detention of 83 other individuals (with many being released later).
Turkey tightened crypto regulations post-scandal
The Thodex debacle has significantly affected the Turkish cryptocurrency market. Its sudden collapse left its users in a state of shock and uncertainty. Many lost trust in cryptocurrency exchanges. In response, the government banned the use of cryptocurrencies for payments in May 2021, citing concerns over their potential use for illegal activities. New regulations were also introduced for cryptocurrency exchanges, requiring them to register with the country's financial watchdog and maintain minimum capital requirements.
Thodex collapse: A warning for crypto investors
The collapse of Thodex serves as a cautionary tale for investors in the cryptocurrency industry. It underscores the importance of conducting thorough research before investing in any exchange or token. Investors should seek exchanges that are transparent about their operations and have a proven track record of security and reliability. Additionally, governments must continue to regulate the industry to prevent similar scams from occurring in the future.
