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Faruk Fatih Özer was discovered lifeless in his incarceration space on Nov. 1. The previous CEO of the now-defunct cryptocurrency exchange Thodex was serving an 11,000-year sentence for orchestrating one of the largest cryptocurrency frauds in history.
His demise signifies the latest development in the Thodex narrative, with ripples so extensive they modified Turkish cryptocurrency regulations.
The preliminary aspects surrounding Özer’s passing suggest suicide, yet the inquiry remains active. This incident has once again thrust Thodex into the public eye.
Here’s a retrospective glance at Özer’s tale, the influence of the cryptocurrency exchange on Turkish law, and how it may have facilitated the nation’s heightened cryptocurrency acceptance.
$2-billion Thodex fraud prompts raids, arrests, and CEO on the run
On April 21, 2021, the Thodex cryptocurrency platform unexpectedly halted trading and withdrawals. The initial announcement indicated that this interruption could last for four to five days. As Cointelegraph Turkey reported at the time, the platform asserted that this was to enhance its operations with the assistance of “globally recognized banks and funding entities.”
However, local news outlets revealed that Özer had escaped to Thailand with more than $2 billion in assets as part of an exit scam. There were also reports that authorities had raided the exchange’s headquarters in Istanbul.
The Istanbul chief prosecutor’s office validated the claims the following day. It declared an investigation into Thodex and announced that police had apprehended 62 individuals allegedly linked to the scam. Özer refuted the allegations, claiming his journey abroad was to engage with foreign investors.
By April 30, 2021, a Turkish court resolved to imprison six suspects, including relatives of the missing CEO and senior company officials, pending trial. Interpol also issued a red notice for Özer.
“Once he is captured with the red notice, we have extradition treaties with a significant portion of these nations. God willing, he will be apprehended and returned,” stated Interior Minister Süleyman Soylu.
Özer managed to avoid arrest for more than a year. Albanian officials ultimately detained him on Aug. 30, 2022. He sought to contest extradition in court, but the ruling was upheld, and Özer was in Turkish custody by April 30, 2023, two years after the scandal initiated.
The prosecution against Özer proceeded rapidly. In July 2023, merely three months after returning to Turkey, he was sentenced to seven months and 15 days in incarceration for neglecting to provide certain documents requested by the Tax Inspection Board during the trial.
On Sept. 8, 2023, the Anatolian 9th High Criminal Court sentenced Özer, along with two of his siblings, to 11,196 years, 10 months and 15 days in prison, coupled with a $5-million penalty.
In court, Özer contended that he and his family were subjected to false allegations. He stated, “I am astute enough to administrate all institutions worldwide. This is evident from the company I established at the age of 22. If I were to create a criminal organization, I would not proceed so ineptly. … It is apparent that the individuals in the file have been victims for more than two years.”
Related: Turkey to empower regulator to freeze cryptocurrency accounts in AML crackdown: Report
Özer was serving his sentence at the Tekirdağ No. 1 F-Type High Security Closed Penal Institution when he passed away. F-Type prisons are high-security facilities designated for political detainees, members of organized crime factions, and other armed groups serving aggravated life terms.
Human rights activists have frequently voiced concerns regarding the conditions at F-Type facilities. In 2007, Amnesty International highlighted “severe and arbitrary” disciplinary actions, as well as confinement.
Turkey amends its regulations to safeguard investors
The Thodex scandal and its subsequent repercussions were so profound that they compelled the Turkish administration to revise its stance toward cryptocurrencies.
Immediately after news of Özer’s departure from the nation, the Central Bank of the Republic of Turkey prohibited crypto transactions and forbidden payment providers from facilitating fiat on-ramps for cryptocurrency exchanges. The formal notice forbade “any direct or indirect utilization of crypto assets in payment services and electronic money issuance.” Notably, the ban did not encompass banks, allowing users to still deposit lira into cryptocurrency exchange accounts through bank transfers.
The prohibition aimed to ascertain financial stability, while other agencies like the Capital Markets Board (CMB) and the Financial Crimes Investigation Board (MASAK) sought to legitimize trading operations. In May 2021, MASAK modified money laundering and terrorism financing laws to integrate provisions for cryptocurrency.
By 2024, the “Law on Amendments to the Capital Markets Law” took effect. This expanded on the initial modifications in 2021, which included comprehensive consumer protection measures alongside stipulations on licensing and reporting.
These new regulations, which also intended to move Turkey off the Financial Action Task Force’s “gray list” of nations with inadequate Anti-Money Laundering practices, have in turn stimulated the local cryptocurrency sector.
Chainalysis’ “2025 Geography of Crypto Report” determined that Turkey led the Middle East and North Africa in value received in cryptocurrencies. Trading activity also surged last year.
In the long run, the Thodex scandal may have resulted in increased cryptocurrency acceptance within the country, but only after it shook the Turkish cryptocurrency landscape and left numerous investors unsupported. It also culminated in the imprisonment and death of its architect and CEO.
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