More light is expected to be shed on how and why the founder of one of Turkey’s largest crypto exchanges stashed stolen funds in Malta-based crypto wallets as legal proceedings get underway in Turkey.
According to a Turkish bill of indictment, Thodex crypto exchange founder Faruk Fatih Özer defrauded thousands of customers and vanished with around €13 million of their funds.
The lion’s share of those funds, around €10 million, was stashed in crypto wallets located in Malta.
Özer is the founder of Thodex, which was one of Turkey’s largest cryptocurrency exchanges. He absconded in 2021 with millions of euros belonging to some 390,000 clients from across the country.
According to Turkish financial investigators, he hid at least €10 million of those funds in Malta-based crypto wallets. He then fled to Albania, where he was caught last year on the strength of an Interpol Red Notice.
After an Albanian judge in May ordered his extradition to Turkey, Özer made his first appearance in a Turkish court on Monday morning.
An indictment by the Anatolian Chief Public Prosecutor’s Office accuses Özer of defrauding hundreds of thousands of Thodex clients. The indictment follows an investigation conducted by MASAK – Turkey’s Financial Crimes Investigation Board, the country’s financial intelligence unit.
The MASAK report, reported by several media outlets in Turkey, found that Özer transferred client crypto assets worth a total of approximately €10 million from three separate accounts to wallets at a crypto asset service provider in Malta.
Those crypto wallets, according to MASAK’s investigations, belong to Faruk Fatih Özer and co-defendants Cem Uzunoğlu and Zuhal Özer.
The 268-page indictment singled out 21 defendants for charges of “establishing and managing an organisation for the purpose of committing a crime” and “fraud through using information systems, banks or credit institutions”, among other charges.
An incredible prison sentence of 40,564 years is being sought for each of the 21 defendants for aggravated fraud and forming a criminal organisation.
The Istanbul-based exchange had embarked upon aggressive advertising campaigns featuring famous Turkish models to lure investors in, at first promising them luxury cars in return for their business.
But after the exchange suddenly went dark in April 2021, and when Özer and their funds appeared to have vanished, a number of users soon got themselves legal representation and filed a fraud complaint against the exchange and its executives.
In court on Monday, Özer continued to deny the charges.
“The allegations in the media and in the indictment are baseless. I did not defraud anyone. I started a company, and my company was hacked,” he claimed in court.