Founder of Turkish crypto exchange sentenced to over 11,000 years in prison

• Thodex once stood as one of Turkey’s largest cryptocurrency exchanges, but it abruptly went offline in April 2021.
• The collapse of the exchange had a profound impact on Turkish citizens, as cryptocurrency served as a hedge against skyrocketing inflation and the significant devaluation of the national currency, the lira.

Thodex once stood as one of Turkey’s largest cryptocurrency exchanges, but it abruptly went offline in April 2021. Simultaneously, Faruk Özer disappeared, leaving over 400,000 users in the dark. Furthermore, these users had no access to their deposits totaling around $2 billion in cryptocurrencies. Özer managed to escape to Albania, but authorities arrested him in August 2022 following an Interpol red notice.

Record-breaking sentence for crypto fraud By April 2023, authorities extradited Özer to Turkey, where the police promptly detained him, bringing seven charges against him. These charges included establishing and managing an organization with the intent to commit a crime and being a member of a criminal organization. The charges also included fraud involving the use of information systems linked to banks or credit institutions, fraud against merchants, company executives, and cooperative managers, and money laundering involving assets derived from criminal activities.

Upon uncovering the case, authorities imprisoned Özer’s brother, sister, and four other high-ranking employees. They also detained at least 83 individuals as part of the investigation. The subsequent trial involved 21 defendants, who faced the potential for a cumulative prison sentence of up to 40,564 years.

On Thursday 7 Spetember, the Anatolian 9th Heavy Penal Court announced its verdict, acquitting 16 of the 21 defendants. It also released four of the seven incarcerated individuals due to a lack of compelling evidence. The remaining defendants received varying prison terms for their involvement in various criminal activities related to the Thodex collapse.

The collapse of Thodex had a profound impact on Turkish citizens, as cryptocurrency had served as a hedge against skyrocketing inflation and the significant devaluation of the national currency, the lira.