July 2, 2022
  • July 2, 2022

Possible cryptocurrency fraud is another blow to Turkey’s stability

By on April 23, 2021 0

A cryptocurrency exchange in Turkey suspended operations this week amid fraud charges, freezing around $ 2 billion in investor money, and authorities said they were looking for the company’s founder.

Turkish authorities raided offices in Istanbul associated with Thodex, a cryptocurrency trading platform, on Friday morning and arrested more than 60 people, the private Demiroren news agency reported.

Thodex founder, 27, Faruk Fatih Ozer, left Turkey for Albania on Tuesday, Turkish authorities said, who added that they asked for his extradition.

The cryptocurrency company has nearly 400,000 active users whose accounts were nominally worth a total of $ 2 billion, according to Oguz Evren Kilic, an Ankara lawyer who represents Thodex investors. If their money were gone, the losses would add another element of instability to Turkey’s already fragile economy.

The standard of living in Turkey suffers from double-digit inflation and a wobbly currency. Although cryptocurrencies are inherently risky, many Turks have turned to them to protect their economies, with the Turkish lira losing more than a quarter of its value against the dollar last year.

Turkey’s central bank last week prohibits the use of crypto-currencies for purchases, citing the “significant risks” involved.

Thodex had made a name for himself with commercials featuring Turkish celebrities dressed in bright red outfits and draped over a highly polished black automobile.

“Certainly the economic situation is having an effect on this,” Mr Kilic, the lawyer, said in an interview. “In these times of crisis, people want to reduce the impairment of the assets they have.”

The sagging lira raised the cost of imported goods and fueled inflation, leading to a constant erosion of living standards. In March, the annual rate of inflation was 16%, according to official figures, which many economists say underestimate the real rate.

In a statement on the Thodex website, Mr Ozer, the founder of the company, insisted he had left the country simply to consult with foreign investors and would return. He said the charges were a “smear campaign” and blamed the shutdown of the trading platform on a cyber attack.

Thodex “hasn’t assaulted anyone,” he said, adding that only around 30,000 accounts “are in suspicious situation”.

Mr. Kilic noted that none of Thodex’s clients were able to access their accounts. “If you can’t access the account then you are a victim,” he said.

On Twitter, people reacted to a statement from Thodex with crying face emojis. “There are people who trust and invest everything in you,” wrote one user.