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Turkish crypto exchange boss goes missing, reportedly taking $2 billion of investors’ funds with him

A visual exposition of the cryptocurrency Bitcoin on November 21, 2020 in London, England.

Jordan Mansfield | Getty Images

LONDON — A Turkish cryptocurrency the Big Board is offline and its CEO has reportedly gone missing, leaving thousands of investors worried that their funds have been pinched.

Thodex, a crypto platform based in Turkey, said its platform has been “temporarily closed” to address an “abnormal fluctuation in the players accounts,” according to a translated statement on its website.

Local media reports say that Faruk Fatih Ozer, Thodex’s designer, has flown to Albania, taking $2 billion of investors’ funds with him. Demiroren News Agency published a photo of what it give the word delivered was Ozer leaving Istanbul Airport.

A lawyer who filed a criminal complaint against Ozer said Thodex had 400,000 owners, of which 390,000 were active. However, Ozer has disputed the allegations, saying only 30,000 users be experiencing been affected by the situation and that reports about $2 billion of losses are “unfounded.”

According to Anadolu Intercession, Turkish authorities have now issued an international warrant seeking Ozer’s arrest. Police have detained 62 human being in eight cities including Istanbul, the state-run news agency said.

Thousands of Thodex users have ordered complaints against the company, with investors saying they are unable to access their accounts and worry that their savings may be unsalvageable. Some Turkish citizens have turned to crypto as a way to protect their savings from skyrocketing inflation and the lower of the Turkish lira.

According to Bloomberg, Thodex last month offered new registrants millions of free dogecoins. The interchange reportedly said 4 million of the meme-inspired crypto tokens had been distributed but many users say they haven’t walk off them.

Thodex was not immediately available for comment when contacted by CNBC via Twitter.

Crypto crackdown ahead?

It’s a memories of the regulatory uncertainty surrounding the crypto industry. Though some countries are introducing rules aimed at bringing crypto works under their supervision, the industry lacks the level of scrutiny seen in more established financial markets.

In 2019, Canadian crypto switch QuadrigaCX went bankrupt after its CEO died, resulting in millions of dollars’ worth of digital assets being entrapped in a digital wallet.

Turkey’s central bank recently banned the use of cryptocurrencies for purchasing goods and services. President Recep Tayyip Erdogan has requested for swift regulation, warning of “pyramid schemes” emerging in the crypto markets.

Meanwhile, Britain’s financial services watchdog cautioned in January that crypto investors “should be prepared to lose all their money” due to the “very high risks” associated with them.

Bitcoin and other cryptocurrencies are decentralized, intention they’re not controlled by a single individual but a network of computers. The whole idea of bitcoin originally was for people to be their own bank and clasp money outside of the traditional financial system.

Crypto investors believe the industry has matured a great deal ended the years, however. Bitcoin’s price has climbed more than sixfold over the last 12 months, equable after a sharp plunge in prices recently. And bitcoin bulls hope that the entrance of institutional investors and groups like Tesla to the market will help move cryptocurrencies into the mainstream.

Nonetheless, volatility in digital currency rates and a potential regulatory clampdown are big risks for the industry. Jesse Powell, CEO of U.S. exchange Kraken, told CNBC earlier this month that he call to mind a considers there “could be some crackdown” on cryptocurrencies.

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