|
thisCrowd - Audio Read
Getting your Trinity Audio player ready...
|
Few stories are as compelling as the journey of Thodex, a Turkish cryptocurrency exchange that experienced soaring highs and devastating lows. This is the tale of a crypto exchange that left a shocking mark on the industry.
Thodex’s story begins in 2017 when it was founded as Koineks, positioning itself as the fourth cryptocurrency exchange in Turkey. However, its ambitions extended far beyond national borders. In March 2020, it underwent a transformative rebranding, emerging as Thodex and signaling its intention to become a global contender. This pivotal moment was underscored by the acquisition of a coveted license from the Financial Crimes Enforcement Network, designating it as a Money Service Business (MSB).
Yet, Thodex was not content with mere existence; it yearned for expansion. The exchange introduced a series of rewards campaigns, strategically designed to attract not only new users but also fresh capital. By November 2020, its total transaction volume had surged to an impressive $3 billion.
However, it was a specific rewards campaign in early 2021 that would prove to be the turning point in Thodex’s tumultuous journey. This campaign, centered around Dogecoin, promised to distribute 2 million Dogecoin to new users. The timing was impeccable, coinciding with the highly anticipated “Dogeday” on April 20. This event ignited a frenzy of trading, with over half of Thodex’s trading volume concentrated in Dogecoin.
Yet, on April 19, the cryptocurrency world was rocked by disruptions within Thodex. Initially, a cyberattack was blamed, a common culprit in the crypto space. As the world waited for the momentous April 20, Thodex unexpectedly halted all trading.
In an effort to reassure its bewildered user base, Thodex attributed this trading pause to the keen interest of “prominent financial institutions” seeking substantial partnerships. They promised a swift return to normalcy within a mere 4–5 days. Meanwhile, Faruk Fatih Özer, the architect behind the scenes, vanished from Turkish soil, allegedly departing with a staggering $2 billion worth of cryptocurrencies.
The situation escalated rapidly. Public prosecutors launched an investigation on April 22, as users found themselves unable to access their funds, and Özer’s escape was confirmed. Financial crime units promptly froze Thodex’s assets, while arrest warrants were issued for Özer and 81 other individuals. Interpol added to the global pursuit by issuing a Red Notice.
Legal actions multiplied, including a fraud inquiry into Özer and investigations into Thodex’s tax violations and Consumer Protection Law infringements. The Cyber Crimes Director reached out to foreign exchanges, tracing potential Bitcoin transfers to Binance addresses.
Thodex faced allegations of misusing deposited funds.
In a surprising twist, reports emerged that Özer had compensated certain victims as a gesture of remorse. However, legal consequences loomed ominously. A total of 21 suspects, Özer included, faced charges that could result in a collective prison sentence of up to 40,564 years.
The captivating saga reached its high with Faruk Fatih Özer’s arrest in Albania, making headlines in August 2022. Following his extradition to Turkey, he was detained by the police on seven charges, including the establishment and management of an organization with criminal intent, membership in an organization, fraud involving information systems connected to banks or credit institutions, fraud involving merchants, company executives, and cooperative managers, and the laundering of assets derived from criminal activities.
As the trial unfolded, 21 defendants found themselves confronting the prospect of spending decades in prison. The Anatolian 9th Heavy Penal Court delivered its verdict, acquitting 16 of the 21 defendants and releasing four of the seven incarcerated due to insufficient evidence. Others received varying prison sentences for their respective roles in the unfolding drama.
The Thodex collapse sent shockwaves throughout Turkey. Prior to the debacle, the nation lacked regulations governing cryptocurrency exchanges. However, the incident served as a catalyst for authorities to rethink their approach, leading to the implementation of new regulations in 2021.
In a country where cryptocurrency had been embraced as a hedge against inflation and currency devaluation, the Thodex catastrophe served as a stark reminder of the importance of transparency, oversight, and accountability in the realm of cryptocurrency.
In the end, the story of Thodex, marked by its meteoric rise and stunning fall, serves as a poignant narrative of ambition, deception, and the profound consequences of unchecked power in the cryptocurrency universe. It remains a narrative that will be recounted and contemplated as the cryptocurrency landscape continues to evolve, offering lessons to enthusiasts and regulators alike.
