The CEO of a crypto exchange had absconded with the assets of his clients. Now he has been arrested. He and his colleagues face over 40,000 years in prison. MeinMMO explains what’s behind this.
Cryptocurrencies are a complex topic and many people regularly gain or lose money with them. Now the CEO of a crypto exchange has been caught. He had absconded with the assets of his clients, causing a billion-dollar damage.
Our cover image is taken from the YouTube channel TRT Haber. This depicts the arrested CEO of Thodex.
Company was the first crypto exchange in Turkey with nearly 400,000 users
What kind of company is this? Thodex was the first digital exchange in Turkey where users could trade and exchange their currencies. At its peak, the platform had nearly 400,000 users. Initially, the company was called Koineks and changed its name to Thodex in 2020 to operate globally.
In 2020, the company was licensed as a Money Service Business (MSB) by the Financial Crimes Enforcement Network.
What exactly went wrong? In fact, there was no major crash in 2021. According to various sources, in April 2021 the users’ funds were frozen, and the CEO of the company fled with the clients’ money and disappeared.
He initially claimed that the trading halt on the platform was due to cyberattacks and that the investors’ money was safe. A little later, he absconded from Turkey. Shortly thereafter, the Turkish police arrested dozens of Thodex employees and seized several company devices.
What has happened now? The CEO of Thodex has now been captured in Albania. The Turkish prosecutor’s office has demanded 40,564 years in prison for the CEO and his 20 colleagues. After all, more than 2,000 people have been harmed and are also listed in the indictment. Whether the defendants will ultimately receive such a high penalty is still unclear.
Thodex was alleged to be involved in large-scale frauds and thefts
What is behind the theft? The cryptocurrency crime analysis company Chainanalysis specifically looked at Thodex in its overview for the year 2021, in the broader context of crypto frauds worth a total of 2.8 billion dollars that year, involving “rug pulls”:
A seemingly legitimate company is established, operates normally for a while, and suddenly all the money is gone. Thodex is said to have been such a fraud. According to the analysis company, many of these frauds can be attributed to Thodex (via chainanalysis.com).
Reports vary widely on how much money was ultimately stolen, explains the online magazine PCGamer. After all, cryptocurrencies fluctuate in value very strongly and are dependent on the day.
Currently, cryptocurrencies are having a hard time: The currencies are currently in crisis. The values of Bitcoin and others are falling sharply, and many users are now selling their mining equipment: Former crypto miners are flooding the market with cheap graphics card deals, selling graphics cards even below the manufacturer’s suggested retail price:
