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Crypto Exchange Founder Disappears with $2 Billion

Bitcoin cryptocurrency
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The founder of a popular crypto exchange in Turkey has disappeared, with media reports indicating that he has fled the country with $2 billion as roughly 300,000 frustrated users have suddenly lost access to their accounts.

In Turkey, the national currency lira has been in a secular decline for nine consecutive years, urging people to take some risks in a bid to protect their savings and maybe even earn something. As a result, the recent rise of cryptocurrencies predictably attracted many investors who hoped to protect their money and possibly gain some more. But things did not go well for them as Thodex, one of the country's largest cryptocurrency exchanges, went bust.

Governments cannot control cryptocurrencies. As a result, they can quickly rise to an all-time high (or rapidly drop), making them a particularly attractive investment instrument — especially for those willing to take a risk. In Turkey, anyone can establish a crypto exchange with just 50,000 liras (about $6,000 USD) in capital, reports Bloomberg. Consequently, crypto exchanges are often run by people without proper financial education that serve unqualified investors who do not understand all of the risks.

Thodex was one of the largest cryptocurrency exchanges in Turkey with 700,000 users, many lured in by an introductory offer of 'millions' of free Dogecoins. Apparently, most of those Dogecoins were never distributed.

To make matters worse, media reports say that as many as 391,000 users have now suddenly lost access to their accounts. Following the reports, Thodex "temporarily" closed the platform to address an "abnormal fluctuation in the company accounts."

Meanwhile, Faruk Fatih Ozer, the founder of Thodex, has flown to Albania, taking $2 billion of investors' money with him, reports CNBC (citing local Turkish media). As you would expect, the Turkish Justice Ministry is seeking a so-called "red notice" with Interpol to arrest Ozer.

Thodex denies all the allegations and says that the problem impacts 'only' 30,000 of its clients. The company further states that the inaccurate media reporting has ruined its reputation, making it impossible to continue operations.

"The allegations that [accounts of] 391,000 people disappeared after a loss of approximately $2 billion, which was [reported] to the public on 22.04.2021, are unfounded," a statement by Thodex reads. "It is necessary to make this statement in order to respond urgently to these claims that go beyond the limits of honesty and conscience."

The founder of Thodex vows to return investors' money but hasn't revealed how and when he plans to do it. Meanwhile, a lawyer representing the investors said the money had become "irretrievable," according to Bloomberg.

  • Co BIY
    The first of many I believe. I think it is wrong to quote the value of these "coins" in terms of US dollars or Euros or any other traditional currency.

    How about "4 Billion in Dogecoins vanish along with Turkish exchange founder"

    "Houses of Cards" at least have a physical component.
    Reply
  • kjohn034
    Co BIY said:
    The first of many I believe. I think it is wrong to quote the value of these "coins" in terms of US dollars or Euros or any other traditional currency.

    How about "4 Billion in Dogecoins vanish along with Turkish exchange founder"

    "Houses of Cards" at least have a physical component.

    Anybody who thinks using a Turkish exchange is a good idea gets what they get. You need some common sense to play this game. It says so right in the rules on the back of the box.
    Reply
  • Makaveli
    kjohn034 said:
    Anybody who thinks using a Turkish exchange is a good idea gets what they get. You need some common sense to play this game. It says so right in the rules on the back of the box.

    When it comes to people trying to make a quick buck through crypto no one has time for common sense or to look at the risk.
    Reply
  • InvalidError
    You put your money in pyramid scheme with no credible investment guarantees or protections of any sort, expect to get conned. This isn't the first time that crypto exchange operators have raided the bank and it won't be the last either.
    Reply
  • JamesJones44
    Co BIY said:
    The first of many I believe. I think it is wrong to quote the value of these "coins" in terms of US dollars or Euros or any other traditional currency.

    How about "4 Billion in Dogecoins vanish along with Turkish exchange founder"

    "Houses of Cards" at least have a physical component.

    Right... because quoting it in another digital currency makes sooo much more sense...

    In general there is no such thing as a static currency so no matter what you convert it to, its value is relative to whatever those two currencies were at that moment. If they quoted in bitcoin or ethereum today and bitcoin and ethereum drop 75% like it did after it's last high or doubles from this point, then the value in the story will just as wrong as if they did it in fiat currency.

    Crypto at this moment is way to volatile for just about anyone to get their head around for day to day values. A sample example, how much is a loaf of bread in bitcoin, ethereum, X0, etc. 99% of the people in the world would have no idea and I would put money down in Vegas depending on the day they would be off by at least 20%. However, I bet at least 50% of the people in the US/Europe could tell you what it was worth in their local fiat currency within 5% every day for an entire year.
    Reply
  • helper800
    Even if you do everything "Right" we have many examples like the 2008 financial crisis that will lead to companies making billions at the expenses of the people who got them there with their pensions and home values evaporating into nothing. Bailouts typically only enable this activity. Turkey, USA, Europe; It doesn't matter where or in what form money takes, there will always be shady compounding tactics going on in the background that nobody has the full scope of until something terrible happens. The idea that any individual person can make an informed investment decision on just about anything without the previously mentioned risks is nigh impossible.
    Reply
  • TheJoker2020
    Surely this should be in the "entertainment" section :devilish:
    Reply
  • helper800
    TheJoker2020 said:
    Surely this should be in the "entertainment" section :devilish:
    Lmfao!
    Reply
  • kjohn034
    InvalidError said:
    You put your money in pyramid scheme with no credible investment guarantees or protections of any sort, expect to get conned. This isn't the first time that crypto exchange operators have raided the bank and it won't be the last either.

    Look into Cardano before you cast your vote. So much genius level work by Charles Hoskinson and his team should be recognized. Not all cryptos are even close to being the same.
    Reply
  • zodiacfml
    right. even in our country, least people i'd expect is into crypto. some even urge the local exchange to have dogecoin. history has repeated itself though in 2017-2018.
    Reply