Turkish Crypto Exchange Boss Flees Country Amidst $2bn Fraud Probe
Chief executive of Turkish cryptocurrency trading platform Thodex flees to Albania as estimated $2bn in investors’ assets reportedly lost
Turkey has detained dozens of people in a probe into one of
the country’s biggest cryptocurrency trading platforms, and sought the
company’s founder’s arrest in Albania, following allegations of massive fraud.
Estimates of how much money was at stake in the probe of the
Thodex trading platform varied considerably, with the Haberturk newspaper
saying losses could be as high as $2 billion (£1.4bn).
A lawyer for those affected said about 390,000 active users
were involved, but Thodex chief executive Faruk Fatih Ozer said in a statement
that only 30,000 accounts were involved.
Thodex had handled hundreds of millions of dollars in trade
daily, with 24-hour trading volume at $538m on the company’s last trading day
before it abruptly halted operations last Wednesday, according to Coinmarketcap.
Turkey’s chief public prosecutor’s office said it was taking
action against Thodex for “aggravated fraud” and for “establishing a criminal
organisation”.
Authorities believe Ozer fled to Tirana, Albania, on Tuesday
evening, according to the Milliyet newspaper and other Turkish media reports.
Ozer said the company lacked the financial resources to
continue operating, and promised to return to Turkey after repaying investors,
according to a statement published by Bloomberg.
“The day I repay all my debt, I will return to my country
and give myself in to justice,” Ozer said in the statement.
A previous statement on Thodex’s website said allegations of
fraud were “unfounded” and that the company would resume operations within a
few days.
The earlier statement said Thodex was considering
partnership offers and that Ozer had gone abroad to meet with foreign
investors.
Police launched raids at 6 a.m. across eight Turkish
provinces on Friday with warrants to arrest 78 suspects, following a Thursday
raid on the company’s Istanbul head office. Milliyet reported they had arrested
62 of the 78 people sought.
Interpol issued a red notice for Ozer’s arrest on Friday
morning after a request by the Turkish government.
Turkey’s financial crimes investigation board MASAK blocked
the company’s accounts on Wednesday and began an investigation, Reuters
reported.
Thodex’s apparent collapse came days after Turkey said it
would ban the use of crypto assets for payments, citing the potential for
“irreparable” damage and transaction risks.
The move was one of the factors triggering a cryptocurrency
sell-off last week that erased $200bn from the market capitalisation of
cryptocurrencies as a whole on Friday alone.
Turkish investors have flocked to Bitcoin and other
cryptocurrencies in recent months as a hedge against the country’s high
inflation rates and financial instability.
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