Faruk Fatih Özer was discovered useless in his jail cell on Nov. 1. The previous CEO of now-defunct crypto trade Thodex was serving an 11,000-year sentence for working one of many largest crypto scams in historical past.
His demise marks the most recent flip within the Thodex saga, with ripple results so vital they altered Turkish cryptocurrency legal guidelines.
The preliminary particulars of Özer’s demise 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 trade impacted Turkish legislation 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 trade suddenly shut down trading and withdrawals. The preliminary announcement learn that this might proceed for 4 to 5 days. As Cointelegraph Turkey reported on the time, the trade claimed that this was to enhance its operations with the assistance of “world-renowned banks and funding firms.”
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 stories that police had raided the trade’s places of work in Istanbul.
Istanbul’s chief prosecutor’s workplace corroborated the stories the next day. It introduced a probe into Thodex and mentioned police had arrested 62 people allegedly involved within the rip-off. Özer denied the accusations, claiming his journey overseas was to fulfill overseas 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 workers, pending trial. Interpol additionally issued a pink discover for Özer.
“When he’s caught with the pink discover, now we have extradition agreements with a big a part of these international locations. God keen he might be caught and he might be returned,” mentioned Inside 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 choice 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 through the trial.
On Sept. 8, 2023, the Anatolian ninth Excessive Felony Courtroom sentenced Özer, along with two of his siblings, to 11,196 years, 10 months and 15 days in jail, together with a $5-million high quality.
In court docket, Özer claimed that he and his household had been dealing with false accusations. He mentioned, “I’m good sufficient to handle all establishments on this planet. That is evident from the corporate I based on the age of twenty-two. If I had been to determine a felony group, I might 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-Kind Excessive Safety Closed Penal Establishment when he died. F-Kind 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 concerning the situations at F-Kind prisons. In 2007, Amnesty Worldwide noted “harsh and arbitrary” disciplinary therapies, in addition to isolation.
Turkey modifications its legal guidelines to guard buyers
The Thomex scandal and its ensuing fallout had been so vital 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 payments and prohibited fee suppliers from providing fiat on-ramps for crypto exchanges. The official discover outlawed “any direct or oblique utilization of crypto property in fee providers and digital cash issuance.” Notably, the ban excluded banks, that means that customers can nonetheless deposit lira onto crypto trade 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 Monetary Crimes Investigation Board (MASAK) moved to legitimize buying and selling actions. In Could 2021, MASAK amended cash laundering and terrorism financing legal guidelines to incorporate provisions for cryptocurrency.
By 2024, the “Regulation on Amendments to the Capital Markets Regulation” 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 Monetary Motion Job Power’s “grey record” of nations with insufficient Anti-Cash Laundering measures, have in flip helped spur the native crypto trade.
Chainalysis’ “2025 Geography of Crypto Report” discovered that Turkey led the Center East and North Africa in worth acquired in crypto. Buying and selling exercise additionally spiked final 12 months.
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 trade and left many buyers out to dry. It additionally resulted within the imprisonment and demise of its orchestrator and CEO.
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