Turkish crypto founder vanishes with reported $2bn
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Istanbul (AFP) –
Turkish prosecutors on Thursday launched an investigation after the Istanbul-based founder of a cryptocurrency exchange froze trading and left the country holding a reported $2 billion in investors' assets.
The Thodex exchange suspended trading after posting a mysterious message on Wednesday saying it needed five days to deal with an unspecified outside investment.
Turkish security officials then released a photo of Thodex founder Faruk Fatih Ozer going through passport control at Istanbul airport on his way to an undisclosed location.
Local media reports said Ozer -- reported to be 27 or 28 years old -- had flown either to Albania or Thailand.
Thodex went dark after running a promotional campaign that sold Dogecoins at one-fourth the price at which they were trading on other exchanges.
But the exchange locked in those investments and did not allow the coins to be either sold or converted into other cryptos.
"Why don't you allow my coins to be transferred?" Dogecoin investor Kaya Dinar asked Thodex in one typical tweet from a worried crypto trader.
Reports said the exchange shut down while holding at least $2 billion from 391,000 investors.
"Hundreds of thousands of users cannot get access to wallets holding their crypto assets or cash," investors' lawyer Oguz Evren Kilic told AFP.
"We have started the legal procedures and lodged a complaint at the prosecutor's office," he said.
- 'Aggravated fraud' -
Turkey's private DHA news agency said prosecutors were investigating the businessman on charges of "aggravated fraud and founding a criminal organisation".
Several police vans were seen parked outside the Thodex office on the Asian side of Istanbul on Thursday afternoon.
The Thodex website re-emerged after going dark on Wednesday to state that "we kindly inform you that the negative news on the internet does not reflect the truth".
Ozer also tweeted a statement promising to "return to Turkey in a few days and cooperate with judicial authorities so that the truth can come out".
But Ozer shed no light about his location or why trading had been stopped.
The attorney Kilic said Turkish officials had confirmed to him that Ozer had fled the country but were still trying to determine his whereabouts.
"One would hope that (Thodex) takes positive steps and the problem is resolved quickly, but the situation is getting graver each passing minute," Kilic said in a phone interview.
The news about Thodex had unexpected political ramifications when a picture emerged on social media of a man resembling Ozer sitting in a room with the son of a right-wing politician and Foreign Minister Mevlut Cavusoglu.
"I don't know Thodex's founder Faruk Fatih Ozer," Cavusoglu tweeted on Thursday.
Cavusoglu said the picture was taken when the man resembling Ozer accompanied MP Saffet Sancakli's son to a scheduled meeting in December 2019.
- Aggressive campaigns -
Thodex has launched aggressive campaigns to lure investors before Ozer went missing and shut down the exchange.
It had first pledged to distribute luxury cars through a flashy advertising campaign featuring famous Turkish models.
The platform then launched its Dogecoin drive.
The cryptocurrency is getting particularly popular among people looking to preserve their savings in the middle of a sharp decline in the value of the Turkish lira currency.
The Turkish crypto market remains unregulated despite growing scepticism from President Recep Tayyip Erdogan's government about its safety.
The Turkish central bank has decided to ban the use of digital currencies in payments for goods and services starting from April 30.
It warned that cryptocurrencies "entail significant risks" because the market is volatile and lacks oversight.
"Wallets can be stolen or used unlawfully without the authorisation of their holders," the central banks warned last week.
© 2021 AFP