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Turkish Crypto Exchange CEO Disappeared with $2 Billion Investors’ Funds

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Turkish Crypto Exchange CEO Disappeared with $2 Billion Investors' Funds

The CEO of a Turkish crypto exchange is missing and the exchange is currently offline making thousands of investors worry over their stolen funds worth $2 billion.

The Turkish Crypto Exchange Website is Temporarily Closed

According to a translation statement on its website, Turkey-based crypto company Thodex said that its platform was “temporarily closed” in order to fix “unusual fluctuations in the company’s account”.

Local media reported that Faruk Fatih Ozer, the founder of Thodex, flew to Albania with $2 billion in investor money. Demiroren news agency released a photo with a picture of Ozer leaving Istanbul Airport.

The attorney who filed a lawsuit against Ozer stated that Thodex has 400,000 users, of which 390,000 are active users. However, Ozer denied these allegations on the grounds that the situation affected only 30,000 users, and there were reports that the approximately $2 billion losses were “unfounded”.

According to the Anadolu Agency, the Turkish authorities have issued an international arrest warrant calling for Ozer to be arrested. The official news agency said police had arrested 62 people in eight cities, including Istanbul.

Thousands of Thodex users have filed complaints against the company. Investors said they couldn’t access their accounts and fear that their savings might not be reclaimed. Some Turkish citizens have turned to cryptocurrency to protect their savings from inflation and the devaluation of the Turkish lira.

According to Bloomberg, Thodex made millions of free Dogecoins available to new registrants last month. The exchange reportedly said it had distributed 4 million meme-inspired crypto tokens, but many users said they hadn’t received them yet.

When CNBC contacted Thodex on Twitter, Thodex did not immediately respond.

Will this News Affect the Crypto Industry?

This is a reminder of the regulatory uncertainty surrounding the crypto industry. Although some countries are putting in place rules designed to put cryptocurrency companies under their supervision, the industry lacks the level of scrutiny seen in more mature financial markets.

In 2019, Canadian cryptocurrency exchange QuadrigaCX went bankrupt following the death of its CEO, locking millions of dollars worth of digital assets in digital wallets.

The Turkish central bank recently banned the use of cryptocurrencies to buy goods and services. President Recep Tayyip Erdogan called for rapid monitoring and warned of the emergence of a “pyramid system” on the cryptocurrency market.

At the same time, the UK financial services regulator warned in January that because of the “very high risks” associated with cryptocurrency investors, they should “be ready to lose all of their money”.

Bitcoin and other cryptocurrencies are decentralized, which means that they are not controlled by one person but by a computer network. The whole idea of ​​Bitcoin was originally to allow people to become their own banks and hold money outside of the traditional financial system.

However, cryptocurrency investors believe the industry has matured significantly over the years. The price of Bitcoin has risen more than six times in the past 12 months, despite the recent sharp drop in prices. Bitcoin bulls are hoping institutional investors and companies like Tesla will hit the market, which will help make cryptocurrency mainstream.

However, the volatility of digital currency prices and possible regulatory restrictions remain a major risk for the industry. Jesse Powell, executive director of Kraken, an American exchange, told CNBC earlier this month that he believes there could be a  cryptocurrency crackdown.

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