26.04.202110:29 Forex Analysis & Reviews: Thodex suspends operations over allegations of fraud

A cryptocurrency exchange in Turkey suspended operations last week over allegations of fraud. According to reports, its founder left the country, taking $ 2 billion worth of investor's funds with him.

Local news agency Demiroren said that on Friday morning, Turkish authorities ransacked Thodex offices in Istanbul and arrested more than 60 people.

However, the company's founder, Faruk Fatih Ozer, was missing and is reported to have left Turkey for Albania on Tuesday.

According to Oguz Evren Kilic, an Ankara-based lawyer representing Thodex investors, the cryptocurrency firm has about 400,000 active users, whose accounts are nominally worth around $ 2 billion in total. If their money disappears, the losses will add another element of instability to Turkey's already shaky economy.

Living standards in the country are plagued by double-digit inflation and volatile currency. While cryptocurrencies are inherently risky, many Turks have turned to them as a way to protect their savings, as the Turkish lira has lost more than a quarter of its value against the dollar over the past year.

Just last week, Turkey's central bank banned the use of cryptocurrencies, pointing out its significant risks.

However, the subsidence of the lira led to an increase in the cost of imported goods and inflation, which led to a steady decline in living standards. According to official figures, inflation rate hit 16% last March, which many economists believe underestimates the true rate.

Kilic said this bad economic situation made people want to turn to cryptocurrencies to reduce the loss of the value of the assets they own.

Ozer denied the allegations and insisted that he left the country only to consult with foreign investors. He added that Thodex does not follow anyone, and that only about 30,000 accounts are in a suspicious situation.

But Kilic said none of Thodex customers can access their accounts.