Danger, Turkey’s largest cryptocurrency exchange collapses

Reporter: Avanty Nurdiana | Editor: Avanty Nurdiana

KONTAN.CO.ID – NEW YORK. One of Turkey’s largest cryptocurrency exchanges, the Thodex exchange says financial conditions are at a difficult time to resume operations. This has hundreds of thousands of investors worried about their savings. Authorities are trying to find the 27-year-old company founder, who fled the country.

In the statement of the Chief Executive Officer of Thodex Faruk Fatih Ozer as quoted Bloomberg, pledged to repay investors’ funds and return to Turkey to face punishment. The Turkish government blocked company accounts and police raided Thodex’s headquarters in Istanbul.

According to the calculations of the Haberturk newspaper, the losses could be as high as US $ 2 billion. The victims’ lawyers said the money invested by some 390,000 active users could not be recovered.

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But Ozer said the number of users and the value of the losses were not as big as what the victims’ lawyers said. He said in a statement on the company’s website on Thursday that the affected users were around 30,000. No one knows the conditions

Meanwhile the authorities and customers are trying to find out the details of what happened. A senior official in President Recep Tayyip Erdogan’s office called for regulation of the crypto market. Globally, the jump in digital token prices has been accompanied by confidence and regulatory action after various scams related to trading platforms.

“The Turkish government should take action as soon as possible,” Cemil Ertem, senior economic adviser to Erdogan, told Bloomberg. A pyramid scheme is being created. Turkey will implement rules that are in line with the economy, but also by keeping abreast of global developments.

Thodex is part of the cryptocurrency boom that has attracted many Turks trying to protect their deposits from rampant inflation and volatile currencies. Inflation hit 16.2% in March, three times the central bank’s target of 5%. The Turkish lira has lost 10% against the dollar this year, its ninth straight loss.

The government spent US $ 165 billion in foreign reserves over the past two years. Erdogan said this was part of a futile effort to shore up the national currency. Concerns about dwindling reserves of the nation turned negative when money borrowed by the government from private banks through exchange agreements sparked fears of lira and dollar deposits. This condition encourages customers to look for alternative investment means.

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Last Friday, trading volume on the Turkish crypto market tripled to more than US $ 1.2 billion from the previous week, according to data published by coingecko.com, which tracks data on price, volume and market value on the crypto market. The average daily trading volume on the Turkish stock market index is around US $ 3.1 billion.

“A person can join crypto for as little as 50,000 liras (about $ 6,000),” said Oguz Evren Kilic, a lawyer representing Thodex users, by telephone. There is a large regulatory gap in this area.

Ozer did not respond to multiple calls to his cell phone. The company’s call center also doesn’t pick up calls. Bedirhan Oguz Basibuyuk, a lawyer for Thodex, told Bloomberg he did not know where Ozer was, but he was not in Turkey. Demiroren News Agency reported that Ozer fled to Albania on Tuesday. The news agency published a photo of Ozer at the Istanbul airport.

Last month, Thodex had a lot of promos to upgrade its membership by offering new registrants millions of free Dogecoin. The website says 4 million coins have been distributed, although many people have used social media to complain that they never received them.

“I was born as one of three children to be a civil servant,” Ozer said in the release. He dropped out of high school. When the company ran into financial problems, he said he was contemplating suicide or turning himself in to the authorities, but both options meant the client’s assets would never be taken.

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“So I decided to live and fight, work and pay what I owe you,” said Ozer. On the day Ozer paid all his debts and returned to Turkey and surrendered to the court.