A cryptocurrency exchange in Turkey shut down this week on charges of fraud and frozen an estimated $ 2 billion in investor money. Authorities said they were looking for the company’s founder.
Turkish authorities raided offices in Istanbul The private news agency Demiroren reported that it was connected to Thodex, a cryptocurrency trading platform, and arrested more than 60 people on Friday morning.
The 27-year-old founder of Thodex, Faruk Fatih Ozer, left Turkey for Albania on Tuesday.
According to Oguz Evren Kilic, an Ankara attorney who represents Thodex investors, the cryptocurrency firm has nearly 400,000 active users, whose accounts were nominally valued at $ 2 billion. If their money were lost, the losses would add another element of instability to the already shaky Turkish economy.
The standard of living in Turkey is suffering from double-digit inflation and a shaky currency. Although cryptocurrencies are inherently risky, many Turks have turned to them to protect their savings as the Turkish lira has lost more than a quarter of its value against the dollar in the past year.
Last week, Turkey’s central bank banned the use of cryptocurrencies for purchases, citing the “significant risks” involved.
Thodex had applied with advertisements in which Turkish celebrities in bright red outfits hung over a highly polished black car.
“Certainly the economic situation has an influence on it,” said the lawyer Kilic in an interview. “In times of crisis like this, people want to reduce the depreciation of their assets.”
The falling lira has increased the cost of imported goods and fueled inflation, which has led to a steady erosion of living standards. According to official figures, the annual inflation rate in March was 16 percent. Many economists say they underestimate the real rate of inflation.
In a statement posted on Thodex’s website, the company’s founder, Mr. Ozer, insisted that he had only left the country to consult with overseas investors and would be returning. He said the allegations were a “smear campaign” and accused the shutdown of the trading platform as a cyberattack.
Thodex “didn’t make anybody a victim,” he said, adding that only about 30,000 accounts “have a suspicious situation”.
Mr. Kilic noted that none of Thodex’s customers could gain access to their accounts. “If you can’t access the account, you are a victim,” he said.
On Twitter, people responded to a statement by Thodex with crying facial emojis. “There are people who trust you and invest everything in you,” wrote one user.
