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Fear for Cryptocurrency Scandal Rocks Turkey

Cryptocurency in Turkey via Thodex
Many Turkish citizens have invested in cryptocurrency through Thodex. Credit: William Neuheisel / CC BY 2.0

Thodex, a Turkish cryptocurrency exchange website, left hundreds of thousands of users in the cold when it stopped trading unannounced on Wednesday.

This not only left 390,000 active users without the ability to access the money they have hosted on the site but spurred fraud allegations in the country as well.

Statement by Thodex

Thodex released a statement on its website on Thursday explaining away the issue, without giving many details.

The explanation released by the company reads that the Thodex site will be inoperative for five to six days as they process an “important sale.”

“Services will remain closed for about five working days while the share transfer is completed, but users needn’t worry about their investments,” the Thodex website assured its customers.

Fears in Turkey’s cryptocurrency market

Despite the site’s claims that a major sale is the cause of the issue, there are fears that Thodex has shut down for more nefarious reasons.

Thodex users, some of whom have invested substantial sums with the site, have gone on Twitter to express their concern at not being able to access their money or make transactions since Wednesday.

This scandal comes just after news that Thodex’s trading volume had risen substantially.

According to recent data, daily trading volume on Thodex tripled last Friday in comparison with last week’s statistics.

The users involved in this trading have gone online both to Twitter and Sikayetvar, a Turkish customer complaint website, to speculate on the fate of their investments.

Accusations of fraud

Turkey‘s Financial Crimes Investigation unit (MASAK) has begun investigating both Thodex and its CEO, Fatih Faruk Ozer. It has currently blocked all Thodex bank accounts in the country.

Allegations that the CEO of Thodex Ozer had left the country on Monday were confirmed by a statement released on the company’s official Twitter account.

However, Ozer maintains that he is visiting Thailand for a business meeting and will return to Turkey promptly.

The Istanbul Security General’s anti-cybercrime unit searched Thodex’ headquarters and it was announced Thursday by the Public Prosecutor’s office that an investigation into the company had been launched.

Cryptocurrency in Turkey and around the world

The Turkish central bank has announced that it is banning the use of cryptocurrency in payments on April 30th. The bank cited the risks associated with the anonymity of cryptocurrency.

Cryptocurrency is a popular solution for those Turks who want to insulate themselves from the lack of stability associated with Turkish lira and high inflation.

The main thrust behind the idea of cryptocurrency is to be free from all governmental controls and regulations; however, as time has gone on, abuse has led to charges of money laundering and other financial malfeasance worldwide.

Alexander Vinnik, a Russian who was charged in Greece with money laundering, was arrested in northern Greece in July of 2017.

He is currently being sought by authorities in the United States, France and Russia, all of which have issued international arrest warrants for him over an e-currency platform he set up and is charged with using for money-laundering purposes.

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