Prosecutor Seeks over 40,000 years Jail Time for Fraud and Money Laundering by a Crypto firm

Key Takeaway:

  • A 40,000-year prison sentence could be handed down to a runaway Turkish crypto CEO.

The Turkish prosecutor’s office has sought 40,500 years in prison for 21 people involved in the defunct cryptocurrency exchange Thodex. Interpol has been looking for the company’s leader for over a year with no success.

Faruk Fatih Ozer, the 28-year-old founder of Turkish cryptocurrency platform Thodex, could face a 40,000-year prison sentence if caught. Ozer is currently on the run after closing down the cryptocurrency exchange and embezzling $24 million from users last year.

Thodex, a defunct cryptocurrency exchange, shut down ‘for several days’ in April of last year, never to reopen. Not long after, rumours circulated that the CEO, Turkish national Faruk Fatih Ozer, had stolen $2 billion in user funds.

Ozer was last seen in April, when he was said to have travelled into Albania from Istanbul to meet with clients. Interpol has issued a Red Notice for his capture after he has been missing since that day while being chased by Turkish officials.

The reason is “creating organisations for the purpose of committing crimes,” with his suspected fraud estimated to be in the area of $24 million, rather than the previously rumoured billions, according to the most recent indictment.

According to Hurriyet, prosecutors are demanding hefty penalties for cryptocurrency exchange founder Faruk Fatih Ozer and 20 others engaged in his activities. They’ll have to serve 40,564 years in prison.

They were accused of conspiring to construct a criminal organisation, as well as fraudulent transactions and money laundering activities.  Since the collapse of Thodex, more than 60 individuals have been detained, with six of them being imprisoned.

According to the prosecutor’s office, about 400,000 people have lost money as a result of the attackers’ acts, totaling 356 million lire (approximately $24 million). Although crypto specialists predict that the cost of the attack will be significantly higher – $2.6 billion.

“As a mostly unregulated business, crypto trading fraud is common, so it’s nice to see prosecutors baring their fangs when it comes to tracking down blatant cases of fraudulent behaviour,” said Mark Crichton, Head of Product at anti-fraud technology provider Outseer.

“Despite Thodex executives’ denials of wrongdoing, the fact that the CEO has been on the run for so long doesn’t exactly scream innocent, and there’s been no indication of paying back the investors who were duped.”

The prosecutor in charge of the investigation in Turkey has requested jail terms of up to 40,564 years for each of the 21 officers engaged in the Thodex scandal. As per local news outlet Demiroren News Agency, Thodex’s stakeholders have been accused of forming a criminal organisation, fraud, and money laundering.

If the court accepts the prosecutor’s plea, individuals of the Thodex team will spend the remainder of their lives in prison.

The popularity of Thodex grew in tandem with Turkish inflation and the lira’s depreciation. Owing to financial turmoil, many citizens of the 84 millionth state flocked to cryptocurrency, but their assets were lost due to fraud by Thodex management.

The criteria for bitcoin exchanges have been strengthened in light of the events in Turkey. Users must authenticate transactions worth more than 10,000 lire ($1,100) and notify local regulators.

The platform’s events have morphed into five of the greatest cryptocurrency scams in the last decade. The scam affecting PlusToken users in the Chinese market, which lost a total of $2.9 billion in 2018, is only second to the Thodex robbery.

Aadrika Sharma
Aadrika Sharma

I enjoy writing and try to learn new things every passing day!

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