Former Thodex Crypto Exchange CEO Faces Multiple-Millennium Prison Sentence
9 Sep 2023 by Rory Kejzerko 2 min read
Former Thodex Crypto Exchange CEO Faces Multiple-Millennium Prison Sentence

This past week has hosted a flurry of crypto stories involving illegitimate actors, and as of a Turkish court ruling yesterday, we now have another one. This latest case involves Faruk Özer- former CEO of the now-defunct Turkish crypto exchange Thodex- and how his crypto exchange abandonment has led him to a multiple-millennium prison sentence. 

Back in April 2021, Turkey’s Thodex crypto exchange suddenly went offline, with its founder Faruk Özer following suit by immediately vanishing. Such a scenario led to 400,000 Thodex users being unable to access around $2 billion worth of crypto funds.

Of course, what this infers is that Özer had essentially conducted a CEX-level rug pull, wherein he’d wealthily raced off into the sunset whilst leaving his user base completely in the dark. 

It was later found out that Özer had fled to Albania, before being arrested 16 months later in August 2022 after an ‘Interpol red notice’ was made for him (i.e. an international law enforcement agreement to locate and provisionally arrest a person pending extradition, surrender, or similar legal action). 

Come April of this year- 2 years after his initial disappearance- Özer was extradited back to Turkey. On arrival, he was detained by local authorities under seven charges, with these being establishing and managing an organisation with the purpose of committing a crime, being a member of such an organisation, fraud by using information systems as tools of banks or credit institutions, fraud of merchants or company executives and cooperative managers, and laundering the value of assets that resulted from said crimes.

Özer’s trial came to a conclusion yesterday (Thursday September 7th)- where he, along with his brother Güven Özer and sister Serap Özer- were sentenced to a combined 11,196 years, 10 months and 15 days in prison (per local media sources). A judicial fine of 135 million liras (approximately $5 million) was also imposed.

As Thodex was one of Turkey’s largest crypto exchanges- and therefore had many employees- at least 83 people were detained as part of the investigation. In total, yesterday’s trial had another 21 defendants facing a combined maximum of 40,564 years in prison- however sixteen of these were acquitted and another four were released due to a lack of evidence.

Although coming to fruition via an objectively negative DeFi storyline, Özer and co’s harsh sentences should benefit the crypto space in the long run, as through serving as an unofficial precedent and warning signal to other powerful figures, it may deter another Thodex situation from happening…

However that being said, people are most-likely going to remember Sam Bankman-Fried’s continued liberty more vividly, despite the fact that his FTX failings lost $8 billion worth of consumer investments. 

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This article is intended for educational purposes and is not financial advice.