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A Turkish court sentenced Faruk Ozer, Thodex founder and former CEO, to over 11,000 years in prison for defrauding investors. 

Many Turks invest in cryptocurrencies to hedge their savings against high inflation.

Crypto investors should invest in secure, transparent and accountable investment platforms. 

Keywords: Turkey crypto exchange, crypto in Turkey, Faruk Ozer CEO, Thodex CEO, Thodex founder, Thodex exchange, Turkish crypto market
## Introduction
Due to high incidences of crypto frauds and scams many governments are giving harsh sentences to the perpetrators. A good example is the recent sentencing of Faruk Ozer, Thodex founder and former CEO, to more than 11,000 years in prison. This post analyzes the circumstances that led to the Thodex crypto exchange crash and the impact of Ozer’s imprisonment. 

Read also: [Gate.io Committed ₺1M to Turkey Earthquake Recovery, Launches Charity NFT Collection](https://www.gate.io/blog_detail/2129/gateio-committed-1m-to-turkey-earthquake-recovery-launches-charity-nft-collection "Gate.io Committed ₺1M to Turkey Earthquake Recovery, Launches Charity NFT Collection")
## The Collapse of Thodex Crypto Exchange
Faruk Özer, Thodex founder and CEO, was sentenced to 11,196 years, 10 months and 15 days in jail due to his role in the collapse of the crypto exchange. According to the Anatolian 9th Heavy Penal Court, Ozer defrauded more than 400,000 users of over $2 billion in cryptocurrencies. 

The Court sentences the former Thodex CEO alongside his key accomplices who include his brother Güven Özer and sister Serap Özer. In addition to the prison sentence the Anatolian Ninth High Criminal Court imposed a fine of 135 million liras, worth around $5 million, on the trio.

Thodex, a large Turkey crypto exchange, was established in 2017. It grew significantly during 2020 and 2021 as it attracted thousands of crypto investors who aimed to benefit from the crypto boom. Since the Turkish crypto exchange offered different trading pairs many traders, both amateurs and seasoned ones, joined it. 

In addition, it had a very competitive user-friendly interface suitable for traders at different levels of trading experiences. Nevertheless, Thodex exchange suddenly ceased operations in 2021 without clear explanations. In fact, the reasons the management gave for the closure of Thodex were unconvincing and contradictory at times. 

First, the team said that there was an undefined investment which had necessitated a temporal pause in trading. At another time, Thodex CEO Ozer said that the exchange was cyber-attacked which resulted in the loss of many cryptocurrencies. 

Nevertheless, several local publications speculated that the pause in withdrawals and trading was part of an exit scam which Faruk Ozer CEO masterminded. Subsequently, Ozer fled to Albania where he stayed for two years before being arrested and extradited to his home country, Turkey. In fact, the Turkish government engaged Interpol which raised a red notice against Ozer. 

Already, a group of Thodex users filed a case against Ozer and his associates leading to their trial. Lawyer Oguz Evren Kilic, represented several Thodex customers who failed to access their cryptocurrencies on the exchange.  

Read also [how to buy and sell crypto via Gate Turkey (GateTR)](https://www.gate.io/uk/article/31907 "how to buy and sell crypto via Gate Turkey (GateTR)")
## The Legal Case against Former Thodex CEO, Ozer
When Ozer was extradited to Turkey in April this year the police detained him pending his trial for seven charges which include establishing a crypto organization for the purpose of committing crimes, committing fraud using information systems, leading a criminal organisation and laundering of customers’ assets. 

When the Turkish government established Ozer and his associates’ criminal activities, the police arrested Ozer’s brother, his sister and four other people. With time, 83 people were detained to facilitate investigations over the Thodex case.

After a full trial, The Anatolian 9th Heavy Penal Court released 16 of the 21 accused people for lack of evidence. Nonetheless, the other defendants were pronounced guilty and were given different prison sentences. 

Read also: [Don’t do what this Turkish NFT Investor did so You don’t end up Living with Your Parents](https://www.gate.io/blog_detail/2324/dont-do-what-this-turkish-nft-investor-did-so-you-dont-end-up-living-with-your-parents "Don’t do what this Turkish NFT Investor did so You don’t end up Living with Your Parents")
## Former Thodex Crypto Exchange CEO’s Defense
Ozer had a weak defense from the onset since he was arrested while hiding in another country then extradited to Turkey. His main defense was that his family was being unfairly treated during the trial since they had done nothing wrong. He insisted that Thodex went bankrupt which resulted in its closure.

The Analogue Agency quoted him as saying, “There is no mention of a criminal organization in Thodex. I am smart enough to manage all institutions in the world. This is evident from the company I founded at the age of 22. If I were to establish a criminal organization, I would not act so amateurishly.’’  

The fact that the court gave Ozer a lengthy prison service means that it did not buy his argument. 

Read also: [SVB Crash Caused the Butterfly Effect in the Crypto Market](https://www.gate.io/blog_detail/2303/svb-crash-caused-the-butterfly-effect-in-the-crypto-market-what-should-investors-do "SVB Crash Caused the Butterfly Effect in the Crypto Market")
## Significance of Thodex in Turkish and the Global crypto Market
The collapse of Thodex did not deter many Turkish citizens from using cryptocurrencies due to several factors which include the high inflation in the country. Basically, inflation has been hitting double-digit figures for a long time. As a result, many Turks turned to cryptocurrencies to preserve the value of their savings. 

Mr Kilic, the lawyer who represented a group of former Thodex customers during Ozer’s trial said, “In such times of crisis, people want to diminish the loss of value of the assets they have.” Some analysts believe that the Lira’s rate of inflation in March was more than the official stated figure of 16%, showing how dire the situation is in the country.  

Read also: [FTX’s collapse Affected a Wide Cross section of the Crypto Ecosystem](https://www.gate.io/blog_detail/1806/ftx-s-collapse-affected-a-wide-cross-section-of-the-crypto-eco "FTX’s collapse Affected a Wide Cross section of the Crypto Ecosystem")

According to a survey, entitled “Understanding Cryptocurrency Users”, conducted by <a href="/zh-tw/price/kucoin-kcs" target="_blank" class="blog_inner_link">KuCoin</a>, half of adult Turks invest in cryptocurrencies. It also shows that the adoption of crypto assets increased by between 40% and 52% since 2021. 

In addition, about 58% of the survey participants indicated that they invest in cryptocurrencies to increase their wealth while 37% showed that they do so to hedge against inflation. In general, the Turkish crypto market adopts the buy and hold strategy to maintain the value of their financial resources. As such, they do not target to get quick returns from their crypto investments.

Indicatively, the Turks are likely to view the long jail term for Ozer as a strong deterrent to other Turkish citizens who might want to defraud crypto investors in the country. Generally, long imprisonment terms are common in the country. Apart from Ozer there are other convicted criminals who received lengthy jail terms. 

As an example, in 2016 a court in Turkey sentenced Fethullah Gülen, an adversary of President Recep Tayyip Erdoğan, to 1,900 years in prison. Similarly, Adnan Oktar, convicted of a number of crimes including sexual assaults, was given a jail term of 8,600 years. 

Nevertheless, crypto investors in Turkey and other countries have drawn several lessons from this incident. Investors should be cautious when choosing their investment platforms to avoid similar financial losses. They should invest in platforms that are transparent, secure and accountable. 

In addition, governments should increase their regulatory oversight on firms that offer crypto related investment products and services. In the future many governments are likely to ensure that cryptocurrency exchanges that operate in their countries are regulated and secure. 
## The Need to Invest in Secure and Transparent Cryptocurrency Exchanges
Having discussed the collapse of Thodex and the subsequent arrest and conviction of Faruk Ozer, it is important to highlight that there are various centralized crypto exchanges such as Gate.io which are secure and transparent. 

Apart from securing your crypto investments, Gate.io exchange, for instance, has other financial benefits like its [Token Reward program](https://www.gate.io/blog_detail/2216/how-to-benefit-from-gateios-token-reward-program "Token Reward program"), designed to increase user engagement and loyalty. 

Basically, Gate.io users earn various tokens when they take part in different activities on the platform which include cryptocurrency trading, referring new users to the platform and other related activities. The investors will use the tokens they earn to pay for various activities. For instance they can use them to pay for their listing, withdrawal and trading fees. 
## Conclusion
A Turkish court of law sentenced the Thodex founder and former CEO to more than 11,000 years in prison for various crimes he committed while running the crypto exchange. He was charged for establishing a crypto organization for the purpose of committing crimes, committing fraud using information systems, leading a criminal organisation and laundering of customers’ assets. 

<div class="blog-details-info">
<div>Author:** Mashell C.**, Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>

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Turkish Crypto Exchange Thodex CEO Sentenced to 11,196 Years in Prison