Crypto-currency fugitive kept €13 million of stolen customer money in Malta
The founder of one of Turkey’s largest cryptocurrency exchanges who absconded with the funds of some 390,000 customers from across the country kept €13 million of those funds in Malta, according to charges in an indictment against the founder of the Thodex exchange Faruk Fatih Özer.
An Albanian court ruled this week that Özer can be extradited to face justice in Turkey, where prosecutors are demanding an incredibly long prison sentence for him and his 20 co-accused.
In an indictment by the Anatolian Chief Public Prosecutor’s Office, Özer is accused of defrauding hundreds of thousands of Thodex customers. The indictment follows an investigation led by MASAK – Turkey’s Financial Crimes Investigation Board, the country’s financial intelligence unit attached to the Ministry of Finance and Treasury.
The MASAK report, reported by several media outlets in Turkey, found that Özer transferred the client’s crypto assets with a total value of €13.2 million (253,714,909 Turkish lira) from three separate accounts to wallets at a crypto asset service provider in Malta. Those crypto wallets, according to MASAK’s investigations, belong to Faruk Fatih Özer and the co-defendants Cem Uzunoğlu and Zuhal Özer.
Özer had been on the run for over a year but will now be extradited to Turkey after he was arrested in Albania in August thanks to an Interpol Yellow Notice issued for his arrest on 23 April 2021.
He will face charges of aggravated fraud and forming a criminal organization, Turkish state media reported aa.com reported on Friday.
Özer’s 27-year-old Thodex exchange was inexplicably dark last year and left thousands of users suddenly unable to withdraw their funds. Özer then fled to Albania.
Thursday an Albanian Court ordered his extradition to Turkey.
In total, over the past year Turkish authorities have arrested 68 suspects, including Özer’s brothers, as part of their investigation into the Thodex scam.
The 268-page indictment named 21 defendants for charges of “establishing and managing an organization for the purpose of committing a crime” and “fraud using information systems, banks or credit institutions”, among other charges.
An incredible prison sentence of 40,564 years is being sought for each of the 21 defendants.
In total, they are accused of defrauding users out of around €2 billion through an exit scam that took place during a period when bitcoin and the general crypto market were having a bull run in Turkey.
The Istanbul-based exchange embarked on aggressive advertising campaigns featuring famous Turkish models to lure investors in, initially promising them luxury cars in return for their business.
But last year Thodex users said that they suddenly could not withdraw hundreds of millions of euros from the cryptocurrency exchange. A number of users quickly got themselves legal representation and filed a fraud complaint against the exchange and its executives.
The exchange made an announcement at the time to report a temporary shutdown due to “abnormal fluctuations in the company’s accounts.”
Two days after fleeing Turkey last year, Özer denounced what he said were “baseless allegations” against him in a message posted on the company’s Twitter account. He said he had gone abroad to meet investors. “I will return to Türkiye in a few days and cooperate with the judicial authorities so that the truth will come out,” but he never returned.
Özer’s case is the second in a month in which Turkish citizens have used Malta to hide and launder their ill-gotten gains in crypto-currencies.
The Shift reported earlier this month that a Turkish organized crime gang was laundering the proceeds of illegal gambling through a cryptocurrency exchange in Malta.
Around $30 million in cryptocurrency in Malta that belonged to slain Turkish crime boss Halil Falyalı, who was killed last February in northern Cyprus, has been seized by Turkish authorities as part of an investigation into a money laundering ring. illegal gambling.
Turkish authorities said that around $30 million was seized from cryptocurrency accounts in Malta belonging to Falyalı and his wife. The accounts were being sent the proceeds of gambling, which is illegal in Turkey, through the free money transfer app Papara, and were then being converted into a cryptocurrency that did not can be traced.