Crypto CEO behind $2.5B 'rug pull' arrested, faces 40,564 years in prison
Faruk Fatih Özer, the founder and CEO of the now-defunct crypto exchange Thodex, has been arrested in the Albanian city of Vlorë. Özer fled following the collapse of Thodex in April 2021: he initially claimed a halt in trading was due to cyberattacks, and that investors' money was safe, before disappearing. Almost immediately afterwards, Turkish police arrested dozens of Thodex employees and seized the firm's computers.
It subsequently emerged that, in April 2021, Thodex had moved approximately $125 million worth of bitcoin to the established US crypto exchange Kraken. Given the number of investors in Thodex left with nothing, this looks like straightforward theft from a failing business.
It's not the whole story, either. Cryptocrime analysis firm Chainanalysis addressed Thorex specifically in its overview of 2021, in the wider context of a total $2.8 billion worth of crypto scams over this year being 'rug pulls': wherein a seemingly legitimate business is set up, operates as normal for a while, then suddenly all the money is gone. It's large-scale fraud.
«We should note that roughly 90% of the total value lost to rug pulls in 2021 can be attributed to one fraudulent centralized exchange, Thodex, whose CEO disappeared soon after the exchange halted users’ ability to withdraw funds,» says the Chainanalysis report. That works out at an estimate of around $2.5 billion of crypto.
However, other estimates given by Turkish authorities are lower, and as with any crypto story it is hard to work out even approximately what the true value of money lost may have been. Some reports claim Özer fled with 'only' around $20 million worth of crypto and, whatever the total amount lost is, he is not the only Thodex employee accused of
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