The founder of a popular crypto exchange in Turkey has disappeared, with media reports indicating that he has fled the country with $2 billion as roughly 300,000 frustrated users have suddenly lost access to their accounts.
In Turkey, the national currency lira has been in a secular decline for nine consecutive years, urging people to take some risks in a bid to protect their savings and maybe even earn something. As a result, the recent rise of cryptocurrencies predictably attracted many investors who hoped to protect their money and possibly gain some more. But things did not go well for them as Thodex, one of the country’s largest cryptocurrency exchanges, went bust.
Governments cannot control cryptocurrencies. As a result, they can quickly rise to an all-time high (or rapidly drop), making them a particularly attractive investment instrument — especially for those willing to take a risk. In Turkey, anyone can establish a crypto exchange with just 50,000 liras (about $6,000 USD) in capital, reports Bloomberg. Consequently, crypto exchanges are often run by people without proper financial education that serve unqualified investors who do not understand all of the risks.
Thodex was one of the largest cryptocurrency exchanges in Turkey with 700,000 users, many lured in by an introductory offer of ‘millions’ of free Dogecoins. Apparently, most of those Dogecoins were never distributed.
To make matters worse, media reports say that as many as 391,000 users have now suddenly lost access to their accounts. Following the reports, Thodex “temporarily” closed the platform to address an “abnormal fluctuation in the company accounts.”
Meanwhile, Faruk Fatih Ozer, the founder of Thodex, has flown to Albania, taking $2 billion of investors’ money with him, reports CNBC (citing local Turkish media). As you would expect, the Turkish Justice Ministry is seeking a so-called “red notice” with Interpol to arrest Ozer.
Thodex denies all the allegations and says that the problem impacts ‘only’ 30,000 of its clients. The company further states that the inaccurate media reporting has ruined its reputation, making it impossible to continue operations.
“The allegations that [accounts of] 391,000 people disappeared after a loss of approximately $2 billion, which was [reported] to the public on 22.04.2021, are unfounded,” a statement by Thodex reads. “It is necessary to make this statement in order to respond urgently to these claims that go beyond the limits of honesty and conscience.”
The founder of Thodex vows to return investors’ money but hasn’t revealed how and when he plans to do it. Meanwhile, a lawyer representing the investors said the money had become “irretrievable,” according to Bloomberg.