The CEO of the Turkish cryptocurrency exchange site Thodex is missing, and with him, $2 billion dollars worth of investor money. Days prior to the shutdown, fellow cryptocurrency platform Vebitcoin released a strange-looking message on its page in Turkish that, when translated, states the website has ceased all activities upon facing financial strain and will update clients later.
Thodex has since gone offline with CEO and founder Faruk Fatih Ozer reportedly leaving Turkey with $2 billion dollars, leaving 400,000 users without access to their accounts.
The most likely reason for this sudden shutdown can be attributed to Turkey’s central bank banning the usage of cryptocurrencies to buy goods and services. Turkish government officials have had strong words for cryptocurrency with a senior economic adviser to President Erdogan, Cemil Ertem, saying the government should act as soon as possible.
Cryptocurrency has seen a lot of growth in Turkey as the people turned to crypto to protect their savings against inflation, but there is a growing interest in regulation due to problems concerning scams, or as President Erdogan calls them, pyramid schemes.
62 people with connections to Thodex have been detained and questioned by the Turkish police. Authorities have also blocked Vebitcoin’s onshore bank accounts and arrested four employees as a part of their investigation.
Mehmet Nadir Yagci, a Turkish prosecutor in the case, said “Four administrators and personnel of the company were detained on Saturday on allegation of fraud.
On the Hunt
The Turkish police have issued an international arrest warrant for Ozer who reportedly left the country and fled to Albania on April 21. Strangely enough, Ozer made a statement saying that the claims against him are “unfounded” and a “smear campaign against both [himself] and [the] company.
Turkey sends 10 police officers to Kosovo and Albania to arrest founder of crypto currency exchange. https://t.co/NHDWXHg4zG
— Dimitar Bechev (@DimitarBechev) April 26, 2021
Turkish news site Demiroren News Agency published a photo of a man who is said to be Faruk Fatih Ozer leaving Istanbul Airport.
Crypto news site Coindesk interviewed a Turkish crypto investor who went by the name of Mehmet and he noticed something peculiar: certain cryptocurrencies were trading at a much lower price the night before Thodex shut down namely Dogecoin. Other people have pointed out the strange coincidence with one Twitter user pointing out that Dogecoin was selling up to 30% below the market price on the site.
Have you been looking into Turkish exchange Thodex? They are selling Doge 30% under market price, and are withholding the coins when you try to recover them. Sounds like an escape strategy? All this coinciding with the doge pump? They traded over $500 million of Doge in 24 hours. pic.twitter.com/GwLgrqfV80
— Cedric Gerard (@advirtua) April 17, 2021
It’s worth noting that before it shut down, Dogecoin made up more than 53% of Thodex’s trading volume and the company was even offering new users free dogecoins.
Left in the Dark
Oğuz Evren Kılıç, chairman of the Ankara Bar Association’s Capital Markets and Finance Law Commission, said Thodex was experiencing a lot of traffic over Dogecoin and called the situation “suspicious”.
Thousands of users have filed complaints against Thodex worrying that their savings are lost forever. With the site shut down, investors do not have access to their accounts.