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Istanbul: A cryptocurrency exchange in Turkey suspended operations this week amid accusations of fraud, freezing an estimated $2 billion in investors’ money, and authorities said they were seeking the company’s founder.
Turkish authorities raided offices in Istanbul associated with Thodex, a cryptocurrency trading platform, Friday morning and arrested more than 60 people, the private news agency Demiroren reported.
Thodex’s 27-year-old founder, Faruk Fatih Ozer, left Turkey for Albania on Tuesday, Turkish authorities said, who added that they were seeking his extradition.
The cryptocurrency firm has nearly 400,000 active users, whose accounts were nominally worth a total of $2 billion, according to Oguz Evren Kilic, a lawyer in Ankara who is representing Thodex investors. If their money has vanished, the losses will add another element of instability to Turkey’s already shaky economy.
Living standards in Turkey suffer from double-digit inflation and a wobbly currency. Although cryptocurrencies are inherently risky, many Turks have turned to them as a way to protect their savings as the Turkish lira lost more than one-quarter of its value against the dollar in the last year.
Last week, Turkey’s central bank banned the use of cryptocurrencies for purchases, citing the “significant risks.”
“For sure the economic situation has an affect on this,” Kilic, the lawyer, said in an interview. “In such times of crisis, people want to diminish the loss of value of the assets they have.”
In a statement on Thodex’s website, Ozer, the founder, insisted that he had left the country merely to consult with foreign investors and would return. He said the accusations were a “smear campaign” and blamed the shutdown of the trading platform on a cyberattack.
Thodex “has not victimized anyone,” he said, adding that only about 30,000 accounts “have a suspicious situation.”
Kilic noted that none of Thodex’s customers could gain access to their accounts. “If you cannot access the account, then you are a victim,” he said.