Crypto Exchange Goes Dark: Near 400,000 Users Fear Possible $2B Fraud

Nearly 400,000 users of a Turkish cryptocurrency exchange, Thodex, have been left unable to access their accounts or withdraw money from the platform after it abruptly ceased operations.

According to numerous local news outlets, Thodex's CEO Faruk Fatih Özer fled to Thailand from Istanbul Airport earlier this year with $2 billion worth of digital assets, further fueling the speculations on the fraud allegations.

The announcement

First, the platform, which has been operating since 2017, announced a six-hour maintenance period in April 2021 after transaction problems were reported. Then Thodex made an announcement that it will be closed "for about five working days" due to a sale process.

"World-renowned banks and funds, whose names we are going to announce when the agreement process is completed, have been wanting to invest in our company and proposed a partnership for a long time," it wrote. "For this process to be completed, transactions need to be halted and the sale process needs to be completed."

"Services will remain closed for about five working days while the share transfer is completed, but users needn’t worry about their investments."

390,000 active users

Unable to withdraw their money or access their accounts, Thodex's 400,000 users, of which 390,000 were active, took to social media platforms to raise awareness of the issue, voicing their concerns about the possibility of a scam, according to Anadolu Agency.

Lawyer Oğuz Evren Kılıç told Bloomberg that he was contacted by an unspecified number of Thodex users on Wednesday and a legal complaint against the CEO has been filed on their behalf.

In March of 2021, Thodex had announced a giveaway of 4 million Dogecoins to reach more user numbers. However, per Bloomberg, several users tweeted they hadn't received the currency.

According to Daily Sabah, a public prosecutor in Istanbul has launched an investigation into Thodex and police are searching its offices.  

CEO breaks his silence

Özer finally made a comment later by publishing a statement on Thodex's Twitter account and his Instagram account.

He rejected the allegations and said that Thodex has never exploited anyone nor it will in the future. He confirmed that he left the country on April 19, but said it is for a meeting abroad. He said that he'll soon return to Turkey and that the losses of people will be compensated.

ÖNEMLİ DUYURU pic.twitter.com/3aBeJjFSYQ

— THODEX (@thodexofficial) April 22, 2021

However, this isn't what happened. He remains at large, though 62 other people were arrested in connection with the alleged scam.

The news comes following Turkey's ban on the use of cryptocurrencies. According to the new rules that will be effective April 30, citizens can hold crypto, but can't use it to make payments for goods or services.