Faruk Fatih Özer was found useless in his jail cell on Nov. 1. The former CEO of now-defunct crypto change Thodex was serving an 11,000-year sentence for operating one of many largest crypto scams in historical past.
His dying marks the newest flip within the Thodex saga, with ripple results so vital they altered Turkish cryptocurrency legal guidelines.
The preliminary particulars of Özer’s dying level to suicide, however the investigation remains to be ongoing. It has as soon as extra introduced Thodex again into the highlight.
Here’s a glance again at Özer’s story, how the crypto change impacted Turkish law and the way it could have contributed to the nation’s elevated crypto adoption.
$2-billion Thodex scam sees raids, arrest and CEO out on the lam
On April 21, 2021, Thodex cryptocurrency change suddenly shut down trading and withdrawals. The preliminary announcement learn that this may proceed for 4 to 5 days. As Cointelegraph Turkey reported on the time, the change claimed that this was to enhance its operations with the assistance of “world-renowned banks and funding companies.”
But native media reported that Özer had fled to Thailand with over $2 billion in funds as a part of an exit scam. There have been additionally reviews that police had raided the change’s workplaces in Istanbul.
Istanbul’s chief prosecutor’s workplace corroborated the reviews the next day. It introduced a probe into Thodex and stated police had arrested 62 people allegedly involved within the scam. Özer denied the accusations, claiming his journey overseas was to satisfy international buyers.
As of April 30, 2021, a Turkish court docket decided to jail six suspects, together with members of the family of the lacking CEO and senior firm staff, pending trial. Interpol additionally issued a purple discover for Özer.
“When he is caught with the red notice, we have extradition agreements with a large part of these countries. God willing he will be caught and he will be returned,” stated Interior Minister Süleyman Soylu.
Özer managed to evade seize for over a 12 months. Albanian authorities ultimately detained him on Aug. 30, 2022. He tried to attraction extradition in court docket, however the determination was upheld, and Özer was in Turkish custody by April 30, 2023, two years after the scandal started.
The case towards Özer was swift. In July 2023, simply three months after arriving in Turkey, he was sentenced to seven months and 15 days in jail for failing to submit sure paperwork requested by the Tax Inspection Board in the course of the trial.
On Sept. 8, 2023, the Anatolian ninth High Criminal Court sentenced Özer, along with two of his siblings, to 11,196 years, 10 months and 15 days in jail, together with a $5-million superb.
In court docket, Özer claimed that he and his household have been going through false accusations. He stated, “I am smart enough to manage all institutions in the world. This is evident from the company I founded at the age of 22. If I were to establish a criminal organization, I would not act so amateurishly. … It is clear that the suspects in the file have been victims for more than 2 years.”
Related: Turkey to empower watchdog to freeze crypto accounts in AML crackdown: Report
Özer was serving his sentence on the Tekirdağ No. 1 F-Type High Security Closed Penal Institution when he died. F-Type prisons are high-security establishments reserved for political prisoners, members of organized crime syndicates and different armed teams serving an aggravated life sentence.
Human rights advocates have repeatedly raised issues in regards to the circumstances at F-Type prisons. In 2007, Amnesty International noted “harsh and arbitrary” disciplinary remedies, in addition to isolation.
Turkey modifications its legal guidelines to guard buyers
The Thomex scandal and its ensuing fallout have been so vital that they drove the Turkish authorities to alter its insurance policies towards cryptocurrencies.
Immediately following information of Özer fleeing the nation, the Central Bank of the Republic of Turkey banned crypto payments and prohibited cost suppliers from providing fiat on-ramps for crypto exchanges. The official discover outlawed “any direct or indirect usage of crypto assets in payment services and electronic money issuance.” Notably, the ban excluded banks, which means that customers can nonetheless deposit lira onto crypto change accounts utilizing financial institution transfers.
The ban aimed to make sure monetary stability, whereas different companies just like the Capital Markets Board (CMB) and the Financial Crimes Investigation Board (MASAK) moved to legitimize buying and selling actions. In May 2021, MASAK amended cash laundering and terrorism financing legal guidelines to incorporate provisions for cryptocurrency.
By 2024, the “Law on Amendments to the Capital Markets Law” got here into impact. This constructed on the preliminary modifications in 2021, which included extensive consumer protection measures along with provisions on licensing and reporting.
These new measures, which additionally aimed to maneuver Turkey off the Financial Action Task Force’s “gray list” of nations with insufficient Anti-Money Laundering measures, have in flip helped spur the native crypto business.
Chainalysis’ “2025 Geography of Crypto Report” found that Turkey led the Middle East and North Africa in worth acquired in crypto. Trading exercise additionally spiked final 12 months.
In the long run, the Thodex scandal could have led to elevated crypto adoption within the nation, however solely after it rocked the Turkish crypto business and left many buyers out to dry. It additionally resulted within the imprisonment and dying of its orchestrator and CEO.
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