Faruk Fatih Özer was discovered lifeless 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 loss of life 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 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 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 out of the blue 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 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 experiences that police had raided the trade’s workplaces in Istanbul.
Istanbul’s chief prosecutor’s workplace corroborated the experiences the next day. It introduced a probe into Thodex and mentioned police had arrested 62 individuals allegedly concerned within the rip-off. Özer denied the accusations, claiming his journey overseas was to satisfy international buyers.
As of April 30, 2021, a Turkish court docket determined 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, we’ve extradition agreements with a big a part of these international locations. God prepared he will likely be caught and he will likely be returned,” mentioned Inside Minister Süleyman Soylu.
Özer managed to evade seize for over a yr. Albanian authorities ultimately detained him on Aug. 30, 2022. He tried to enchantment 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 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 superb.
In court docket, Özer claimed that he and his household have been going through 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 have been to determine a legal 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 considerations in regards to the circumstances at F-Kind prisons. In 2007, Amnesty Worldwide famous “harsh and arbitrary” disciplinary therapies, 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.
Instantly following information of Özer fleeing the nation, the Central Financial institution of the Republic of Turkey banned crypto funds and prohibited fee suppliers from providing fiat on-ramps for crypto exchanges. The official discover outlawed “any direct or oblique utilization of crypto belongings in fee providers and digital cash issuance.” Notably, the ban excluded banks, which 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 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 modifications in 2021, which included in depth shopper safety 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 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 acquired 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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