Turkish prosecutors on April 22 opened an investigation after the Istanbul-based founder of a cryptocurrency exchange platform shut down his site and fled the country with a reported $2 billion in investors’ assets.
The Public Prosecutor’s Office in Istanbul appealed to personnel for their testimonies on the platform, which is alleged to aggrieve 391,000 active users.
Meanwhile, Abdullah Usame Ceran, a lawyer, filed a criminal complaint against Fatih Faruk Özer, the founder and CEO of the platform, alleging “aggravated fraud.”
Ceran stressed that the platform does not allow any withdrawal transactions currently.
He also said that there were some allegations on social media that Özer, who is reportedly 27 years old, left Turkey on April 20 via Istanbul Airport.
Demirören News Agency published a photograph of Özer taken at a passport control point. He is said to have flown to Albania, although some other local media reports said he was believed to be in Thailand or the United States.
As part of the complaint, seizing all assets of the platform, including vehicles, bank accounts, holdings and shares, was demanded.
After some transaction problems, the platform shared releases on April 19 and April 20 for announcing a six-hour maintenance period.
However, on April 21, the platform made another announcement, saying the company behind the platform would get into an international partnership and that members would able to make transactions again after a five-day maintenance period.
Reports said the website and the entire exchange had shut down while holding at least $2 billion from 391,000 investors.
“The victims are in panic,” said Oğuz Evren Kılıç, an Ankara-based lawyer of some of the complainants.
“They are lodging complaints at prosecutors’ offices in the cities they reside,” he added.
Daily trading volume on Thodex tripled to over $1.2 billion on April 16 from a week earlier, according to data published by coingecko.com.
In a statement, which was unsigned but written in the first-person, on the platform’s website, all claims were denied.
“I have left the country on April 19 to make final negotiations with the investors,” the statement said.
The company suffered a loss of 25 million Turkish Liras (currently $3 million) caused by a cyber attack in 2017, it also said.
It pledged to pay roughly 30,000 users, whose subscription accounts were suspicious, their money over time.
The statement also said that the market capitalization of Thodex was around $40 million.
Thodex has launched aggressive campaigns to lure investors. It had first pledged to distribute luxury cars through a flashy advertising campaign featuring famous Turkish models. The plat-form then launched its Dogecoin drive, in which it sold the cryptocurrency coins at a big rebate but did not allow investors to sell.
Cryptocurrency is getting particularly popular among Turks, who are looking to preserve their saving in the middle of a sharp decline in the value of the Turkish Lira.
Crypto trading volumes in Turkey hit 218 billion liras ($27 billion) from early February to March 24, up from just over 7 billion liras in the same period a year earlier, according to data from U.S. researcher Chainalysis analyzed by Reuters.
The Turkish crypto market remains unregulated despite growing scepticism from the government about the safety and use of digital currencies. There are around 40 cryptocurrency exchange platforms operating in Turkey.
Last week, the Turkish Central Bank decided to ban the use of cryptocurrencies in payments for goods and services starting from April 30.
It warned that cryptos “entail significant risks” because the market is volatile and lacks oversight.
“Wallets can be stolen or used unlawfully without the authorization of their holders,” the Central Bank warned.
Hurriyet Daily News