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Thodex CEO faces jail time in Türkiye over tax offences

thodex ceo jailed on tax crimes
Faruk Fatih Özer, CEO of the defunct crypto exchange, fled the country to Albania in April 2021 with $2 billion in customer funds.

Faruk Fatih Özer, the founder of the now-defunct crypto exchange Thodex, has been sentenced to seven months and 15 days in prison for failing to submit documents to the Turkish Tax Inspection Board.

Thodex was the first global exchange based in Turkey, and it was one of the largest in the country with 391,000 users in April 2021. The exchange shuttered in 2021 after telling customers that it would temporarily suspend trading for partnerships with “big-name banks” to settle, only for Özer to flee to Albania with $2 billion of customer funds in his possession. 

Authorities began to take action after users complained they could not access their funds, issuing arrest warrants for Özer and 81 other suspects.

Özer maintained his innocence throughout the trail, arguing he was not an official at Thodex at the time of the offence. He claimed that a trustee had been appointed, preventing him from presenting the requested documentation. The former CEO alleged that he had been “framed”, but detail surrounding this claim is scant.

Local news source Hurriyet reported that the prosecutor had initially sought a prison term of up to five years on charges of “smuggling” under the Tax Procedure Law, but the court sentenced him to one year and six months of imprisonment.

The sentence was later reduced to seven months and 15 days, taking into account Özer’s “social relations, his behavior after the alleged crime, his conduct during the trial and the potential impact on his future”. 

Özer was also accused of defrauding investors through his platform, similar to the allegations against disgraced FTX founder Sam Bankman-Fried. 

Despite the Thodex debacle, Türkiye has welcomed Web3 technology, announcing plans to use blockchain technology to access digital public services.

General cryptocurrency adoption in the country has also steadily increased over the past few years, with 14 million residents purchasing crypto at some point. The rise is thought to be linked to the highly inflationary Turkish Lira. 

Disclaimer: CryptoPlug does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.

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