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Faruk Fatih Özer was discovered deceased in his prison cell on Nov. 1. The ex-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 passing signifies a new development in the Thodex narrative, with repercussions so profound they modified Turkish cryptocurrency regulations.
The preliminary information regarding Özer’s demise suggests suicide, though the inquiry is still in progress. This incident has once again brought Thodex back into public focus.
Here’s a retrospective look at Özer’s experience, the influence of the crypto exchange on Turkish legislation, and how it may have facilitated the nation’s heightened crypto acceptance.
$2-billion Thodex fraud triggers raids, arrest and CEO on the run
On April 21, 2021, Thodex cryptocurrency exchange abruptly halted trading and withdrawals. The initial statement indicated that this suspension could last four to five days. As Cointelegraph Turkey covered at the time, the exchange asserted that this effort was to enhance its operations with collaboration from “prestigious banks and funding agencies.”
However, regional media reported that Özer had escaped to Thailand with more than $2 billion in assets as part of a getaway scam. There were additional reports that authorities had stormed the exchange’s premises in Istanbul.
The chief prosecutor’s office in Istanbul validated the reports the next day. It announced an investigation into Thodex and stated that authorities had detained 62 individuals purportedly involved in the fraud. Özer refuted the allegations, asserting his trip abroad was to engage with foreign investors.
As of April 30, 2021, a Turkish court resolved to imprison six suspects, including relatives of the missing CEO and senior company personnel, while awaiting trial. Interpol also issued a red notice for Özer.
“When he is apprehended with the red notice, we possess extradition agreements with a significant number of these nations. God willing, he will be captured and brought back,” stated Interior Minister Süleyman Soylu.
Özer evaded arrest for over a year. Albanian officials eventually captured him on Aug. 30, 2022. He sought to contest extradition in court, but the ruling was confirmed, and Özer was in Turkish custody by April 30, 2023, two years after the scandal began.
Özer’s case proceeded rapidly. In July 2023, merely three months after his return to Turkey, he was sentenced to seven months and 15 days in prison for not providing specific 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 a combined term of 11,196 years, 10 months and 15 days in prison, with an additional penalty of $5 million.
In court, Özer contended that he and his family were subjected to false accusations. He expressed, “I am clever enough to manage all institutions globally. This is evident from the company I founded at the age of 22. If I were to create a criminal organization, I would not operate so naively. … It is clear that those named in the case have been victims for over 2 years.”
Related: Turkey to empower regulator to freeze crypto accounts in AML enforcement: Report
Özer was imprisoned at the Tekirdağ No. 1 F-Type High Security Closed Penal Institution at the time of his death. F-Type prisons are high-security establishments designated for political prisoners, organized crime members, and other armed groups serving aggravated life sentences.
Human rights advocates have continuously expressed concerns about conditions in F-Type prisons. In 2007, Amnesty International pointed out “harsh and arbitrary” disciplinary measures, in addition to isolation.
Turkey reforms regulations to safeguard investors
The Thodex scandal and its resulting consequences were so substantial that they compelled the Turkish government to revise its approach to cryptocurrencies.
Immediately after news broke of Özer’s flight from the country, the Central Bank of the Republic of Turkey prohibited crypto payments and disallowed payment providers from facilitating fiat on-ramps for crypto exchanges. The official directive criminalized “any direct or indirect usage of crypto assets in payment services and electronic currency issuance.” Notably, the ban excluded banks, allowing users to continue depositing lira into crypto exchange accounts via bank transfers.
The prohibition was designed to maintain financial stability, while other entities like the Capital Markets Board (CMB) and the Financial Crimes Investigation Board (MASAK) sought to legitimize trading practices. In May 2021, MASAK revised anti-money laundering and terrorism financing laws to integrate guidelines for cryptocurrency.
By 2024, the “Law on Modifications to the Capital Markets Law” was enacted. This built upon the initial reforms in 2021, which included comprehensive consumer protection measures alongside rules regarding licensing and reporting.
These new regulations, which also sought to remove Turkey from the Financial Action Task Force’s “gray list” of nations with insufficient Anti-Money Laundering protocols, have in turn stimulated the local crypto sector.
Chainalysis’ “2025 Geography of Crypto Report” discovered that Turkey led the Middle East and North Africa in terms of value received in cryptocurrency. Trading activity also surged last year.
In the long run, the Thodex scandal may have prompted increased cryptocurrency adoption in the country, but only after it shook the Turkish cryptocurrency market and left many investors stranded. It also culminated in the imprisonment and death of its architect and CEO.
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