The CEO of the now-defunct Thodex cryptocurrency exchange, Faruk Fatih Özer, was found dead in his prison cell on November 1, having been sentenced for orchestrating a massive exit scam worth $2 billion.
His passing has significant implications for the ongoing investigations surrounding Thodex and has reignited public interest in the case’s fallout, especially regarding amendments to Turkish cryptocurrency regulations.
Initial reports suggest his death was likely a suicide, while formal investigations are still underway.
Background of the Thodex Crisis
On April 21, 2021, Thodex abruptly halted all trading and withdrawals, claiming to be restructuring operations. Local reports later indicated that Özer fled to Thailand with the stolen funds. Subsequently, Turkish authorities arrested numerous individuals linked to the fraud, while Özer managed to evade capture for over a year before being detained in Albania.
In July 2023, he received a lengthy prison sentence of over 11,000 years. His accusations included tax evasion and fraud amid claims of innocence. Özer’s assertion in court, where he insisted he could have executed his operations more skillfully, didn’t shield him from the law.
Özer was found deceased while confined at the Tekirdağ No. 1 F-Type High Security Closed Penal Institution, a facility known for housing individuals convicted of serious crimes. Concerns about prison conditions have been noted by human rights advocates.
Legislative Impact
The Thodex scandal severely influenced Turkish policy on cryptocurrencies. Following Özer’s escape, the Central Bank swiftly banned cryptocurrency payments, aiming to bolster financial stability. New laws have also emerged, enhancing protections for investors and efforts to legitimize cryptocurrency transactions.
In summary, while the Thodex scandal has triggered greater scrutiny and regulatory changes in Turkey, it has also highlighted risks and consequences for investors within the expanding cryptocurrency space.
Özer detained by Turkish authorities after being extradited from Albania. Source: AA
