Thodex founder’s sentence overturned, but fraud conviction stands

The Istanbul Regional Court of Justice has overturned part of the conviction against Faruk Fatih Özer, the founder of the now-defunct cryptocurrency exchange Thodex.

The court dismissed charges related to starting an organization to commit a crime but upheld his fraud and money laundering convictions, according to local reporting. 

Özer, who was sentenced to over 11,190 years in prison for allegedly defrauding more than 400,000 investors out of $2 billion, remains incarcerated.

However, the appeals ruling means he will no longer serve time for organized crime-related charges. The court also ordered a retrial on certain aspects of the case, sending it back to a lower court.

Despite the ruling, the court determined that Özer should remain in custody for other crimes.

Thodex collapse

Thodex collapsed in April 2021 after abruptly halting withdrawals, leaving users unable to access their funds.

Authorities later determined that Özer had fled to Albania, where he was arrested in 2022 and extradited to Turkey in 2023. His legal team is now pushing for further leniency, arguing that his sentencing was disproportionate.

Özer has been accused of defrauding thousands of investors and laundering millions through Thodex. After the exchange suddenly ceased operations, he fled to Albania, claiming he was securing funding from foreign investors.

Initially, he promised to cooperate with Turkish authorities and return customer funds. However, he later claimed he was the victim of a cyberattack that depleted the exchange’s assets. His disappearance triggered a criminal investigation, an international manhunt, and protests from investors fearing they had lost their savings.

Thodex was one of Turkey’s largest cryptocurrency exchanges, boasting over 400,000 users and a daily trading volume of approximately $585 million.