Faruk Fatih Ozer the founder of Thodex, Turkish cryptocurrency exchange

On November 21, 2020, in London, England, a visual representation of the cryptocurrency Bitcoin.

On November 21, 2020, in London, England, a visual representation of the cryptocurrency Bitcoin.

Turkish cryptocurrency exchange chief goes missing, allegedly taking with him $2 billion in investor funds.

A Turkish cryptocurrency exchange has recently shut down and its CEO has vanished, leaving thousands of investors fearful that their funds have been stolen.

According to a translated statement on its website, Thodex, a crypto platform based in Turkey, said its platform has been “temporarily closed” to fix a “abnormal fluctuation in the business accounts.”

According to local media sources, Faruk Fatih Ozer, the founder of Thodex, has flown to Albania with $2 billion in investor funds. The Demiroren News Agency published a picture purportedly of Ozer exiting Istanbul Airport.

According to a lawyer who filed a criminal complaint against Ozer, Thodex had 400,000 registered users, 390,000 of whom were involved. Ozer, on the other hand, has denied the claims, claiming that the situation impacted just 30,000 users and that estimates of $2 billion in damages are “unfounded.”

Turkish authorities have now released an international arrest warrant for Ozer, according to Anadolu Agency. According to the state-run news agency, police have arrested 62 people in eight cities, including Istanbul.

Thousands of Thodex users have lodged complaints against the firm, claiming that they are unable to access their accounts and are concerned that their savings could be irretrievably lost. Certain Turkish people have turned to cryptocurrency in order to shield their savings from skyrocketing inflation and the Turkish lira’s depreciation.

According to Bloomberg, Thodex gave millions of free dogecoins to new registrants last month. According to reports, the exchange distributed 4 million of the meme-inspired crypto tokens, but many users say they have not received them.

Thodex did not immediately respond to a request for comment via Twitter from CNBC.

Cryptocurrency crackdown on the horizon?

It serves as a reminder of the industry’s regulatory uncertainty. While some countries are enacting legislation to regulate crypto companies, the sector lacks the degree of scrutiny seen in more developed financial markets.

QuadrigaCX, a Canadian cryptocurrency exchange, went bankrupt in 2019 following the death of its CEO, trapping millions of dollars’ worth of digital assets in a digital wallet.

Turkey’s central bank recently prohibited the purchase of products and services using cryptocurrencies. President Recep Tayyip Erdogan has urged swift regulation, warning of the emergence of “pyramid schemes” in the cryptocurrency markets.

Meanwhile, the UK’s financial watchdog cautioned in January that cryptocurrency investors “should be prepared to lose all their assets” due to the “extremely high risks” involved.

Bitcoin and other cryptocurrencies are decentralized, which means they are not centralized on a single computer but rather on a network of computers. The initial concept of bitcoin was for individuals to function as their own bank and store money outside of the conventional financial system.

However, cryptocurrency investors believe the market has evolved significantly over the years. Bitcoin’s price has more than doubled in the last 12 months, despite a recent dramatic decline. And bitcoin bulls hope that the entry of institutional investors and companies such as Tesla into the market would aid in the mainstreaming of cryptocurrencies.

Nonetheless, market fluctuations in digital currencies and the possibility of regulatory intervention are significant threats for the industry. Jesse Powell, CEO of US-based exchange Kraken, told CNBC earlier this month that he believes cryptocurrencies “might face any crackdown.”

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