Faruk Fatih Özer was discovered useless in his jail cell on Nov. 1. The previous CEO of now-defunct crypto change Thodex was serving an 11,000-year sentence for working one of many largest crypto scams in historical past.
His loss of life marks the newest flip within the Thodex saga, with ripple results so important they altered Turkish cryptocurrency legal guidelines.
The preliminary particulars of Özer’s loss of life level to suicide, however the investigation remains to be ongoing. It has as soon as extra introduced Thodex again into the highlight.
Right here’s a glance again at Özer’s story, how the crypto change impacted Turkish regulation and the way it might have contributed to the nation’s elevated crypto adoption.
$2-billion Thodex rip-off sees raids, arrest and CEO out on the lam
On April 21, 2021, Thodex cryptocurrency change abruptly shut down buying and selling and withdrawals. The preliminary announcement learn that this might 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 corporations.”
However native media reported that Özer had fled to Thailand with over $2 billion in funds as a part of an exit rip-off. There have been additionally experiences that police had raided the change’s places of work in Istanbul.
Istanbul’s chief prosecutor’s workplace corroborated the experiences the next day. It introduced a probe into Thodex and stated police had arrested 62 individuals allegedly concerned within the rip-off. Özer denied the accusations, claiming his journey overseas was to fulfill overseas buyers.
As of April 30, 2021, a Turkish courtroom determined to jail six suspects, together with relations of the lacking CEO and senior firm workers, pending trial. Interpol additionally issued a crimson discover for Özer.
“When he’s caught with the crimson discover, we’ve extradition agreements with a big a part of these international locations. God keen he might be caught and he might be returned,” stated Inside Minister Süleyman Soylu.
Özer managed to evade seize for over a yr. Albanian authorities finally detained him on Aug. 30, 2022. He tried to enchantment extradition in courtroom, however the determination was upheld, and Özer was in Turkish custody by April 30, 2023, two years after the scandal started.
The case in opposition to 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 throughout the trial.
On Sept. 8, 2023, the Anatolian ninth Excessive Prison Courtroom sentenced Özer, together with two of his siblings, to 11,196 years, 10 months and 15 days in jail, together with a $5-million fantastic.
In courtroom, Özer claimed that he and his household had been dealing with false accusations. He stated, “I’m good sufficient to handle all establishments on the planet. That is evident from the corporate I based on the age of twenty-two. If I had been to determine a prison group, I’d not act so amateurishly. … It’s clear that the suspects within the file have been victims for greater than 2 years.”
Associated: Turkey to empower watchdog to freeze crypto accounts in AML crackdown: Report
Özer was serving his sentence on the Tekirdağ No. 1 F-Sort Excessive Safety Closed Penal Establishment when he died. F-Sort 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 considerations concerning the circumstances at F-Sort prisons. In 2007, Amnesty Worldwide famous “harsh and arbitrary” disciplinary therapies, in addition to isolation.
Turkey adjustments its legal guidelines to guard buyers
The Thomex scandal and its ensuing fallout had been so important that they drove the Turkish authorities to alter its insurance policies towards cryptocurrencies.
Instantly following information of Özer fleeing the nation, the Central Financial institution of the Republic of Turkey banned crypto funds and prohibited cost suppliers from providing fiat on-ramps for crypto exchanges. The official discover outlawed “any direct or oblique utilization of crypto property in cost providers and digital cash 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 businesses just like the Capital Markets Board (CMB) and the Monetary Crimes Investigation Board (MASAK) moved to legitimize buying and selling actions. In Might 2021, MASAK amended cash laundering and terrorism financing legal guidelines to incorporate provisions for cryptocurrency.
By 2024, the “Legislation on Amendments to the Capital Markets Legislation” got here into impact. This constructed on the preliminary adjustments in 2021, which included in depth client safety measures along with provisions on licensing and reporting.
These new measures, which additionally aimed to maneuver Turkey off the Monetary Motion Activity Pressure’s “grey checklist” of nations with insufficient Anti-Cash Laundering measures, have in flip helped spur the native crypto business.
Chainalysis’ “2025 Geography of Crypto Report” discovered that Turkey led the Center East and North Africa in worth obtained in crypto. Buying and selling exercise additionally spiked final yr.
In the long run, the Thodex scandal might 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 loss of life of its orchestrator and CEO.
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