Faruk Fatih Özer, the founder and CEO of the now-defunct crypto exchange Thodex, has been sentenced to 11,196 years in prison by a court in Istanbul for crimes including aggravated fraud, money laundering, and organised crime. His sister Serap and brother Guven were also found guilty and received the same jail term.
Thodex was founded in 2017, and found success during a period where Turkey's state currency, the lira, was undergoing a period of rapid inflation. Turkish people began to see crypto as an apparently safer option than the fluctuating lira, particularly when it came to savings, and Özer became a financial celebrity of sorts in Turkey. Thodex collapsed in April 2021, with Özer initially claiming investors' money was safe, before he fled.
Almost immediately afterwards, Turkish police arrested dozens of Thodex employees and seized the firm's computers. It emerged that, in April 2021, Thodex moved approximately $125 million worth of bitcoin to the established US crypto exchange Kraken. Interpol then issued a red notice, and Özer was found in Albania and extradited.
"I am smart enough to lead any institution on Earth," Özer told the court, as reported by state news organisation Anadolu Agency. "That is evident in this company I established at the age of 22. If this were a criminal organization I wouldn’t have acted so amateurishly."
The total amount of money lost in Thodex's collapse is unclear and estimates vary wildly. In court prosecutors identified 356 million liras ($43 million in 2021) of losses, but other reports put it as high as $2 billion and a study by Chainalysis put the value of cryptocurrency lost at Thodex at $2.5 billion. "We should note that roughly 90% of the total value lost to rug pulls in 2021 can be attributed to one fraudulent centralized exchange, Thodex, whose CEO disappeared soon after the exchange halted users’ ability to withdraw funds," says that report.
These long prison sentences have become common in Turkey ever since it abolished the death penalty in 2004. Believe it or not, the Özer siblings got off lightly: state prosecutors were out to set an example with this case, and sought a sentence of 40,562 years. On the bright side for Özer, with good behaviour he'll be out in five or six thousand.
