Turks fear hundreds of millions of dollars lost as Crypto CEO goes missing

Turks fear they may have lost hundreds of millions of dollars in cryptocurrency investments after Thodex, a local trading platform, suspended operations and its CEO allegedly flew out of the country.

Users of the exchange have filed complaints with the Turkish authorities alleging fraud. The company’s platform is inaccessible and prosecutors in Istanbul have started an investigation, the state-run Anadolu news agency reported on Thursday.

Turks have been buying cryptocurrencies in record amounts to help boost returns from their savings after the lira lost about half of its value against the dollar since a currency crisis in 2018 and inflation surged to over 16 percent.

Thodex has 400,000 users, 350,000 of whom are active, said Abdullah Üsame Ceran, a lawyer who has filed a criminal complaint against Fatih Faruk Özer, the founder and CEO, alleging "aggravated fraud", Anadolu said.

The company, established in 2017, announced on Wednesday that it had closed its trading platform for four to five days after receiving partnership offers from a globally renowned bank and fund management companies. Customers should not be concerned, will be kept informed, and should “ignore negative news on the internet”, it said via a statement on Twitter.  

Istanbul prosecutors are appealing to employees to come forward to help with the investigation, Anadolu reported.

Oğuz Evren Kılıç, a lawyer and columnist who is representing an unspecified number of complainants, said the assets of users remained irretrievable. Özer, who is also founder of the company, left the country on a commercial flight from Istanbul at 5:57 p.m. on Tuesday, Kılıç said on Twitter.

“Pyramid schemes are being established in this area” and the government is determined to regulate the industry, said Cemil Ertem, senior economic adviser to President Recep Tayyip Erdoğan, according to Bloomberg.

Trading volumes in Bitcoin between the start of February and March 24 hit 218 billion liras ($19 billion) from a little over 7 billion liras in the same period of 2020, the Guardian newspaper reported last week, citing an analysis of data by Reuters.

(This story was updated to correct company's name.)