The Disappearance of Faruk Fatih Özer: A Crypto Mystery
A Suspicious Departure
On a spring day in 2021, Faruk Fatih Özer stood nervously at Istanbul Airport’s passport control, a queue of impatient travelers behind him. The 27-year-old founder and CEO of cryptocurrency exchange Thodex pulled down his face mask for the security camera. Dressed casually in black trainers, a navy-blue sweater over a white polo shirt, and a small backpack slung over his shoulder, Özer looked like someone embarking on a last-minute trip—or perhaps planning to never return. At 5:57 pm on April 20, the guard stamped his Turkish passport, and Özer made his way to Gate C, allegedly carrying a flash drive containing $2 billion in crypto.
Trouble Brewing
After arriving in Tirana, Albania, at 9:24 that night, Özer checked into the Mondial, a popular 4-star business hotel. Days later, he discovered a mob was furious with him on social media: Thodex customers couldn’t access their funds, and people accused him of absconding with their money.
In a public letter posted on Thodex’s website and his social accounts, Özer denied the allegations, claiming the exchange—which boasted nearly half a million investors and $500 million in daily trade volume—was investigating a suspected cyberattack that caused “an abnormal fluctuation in the company account.” He promised to freeze assets for five days while resolving the issue, citing bad timing for a big business deal he was en route to make: selling the company. Özer declared he would return to Turkey within days to cooperate with authorities and prevent user losses. But suspicions remained that he might be orchestrating Turkey’s biggest heist.
The Manhunt Begins
Turkish authorities swiftly responded. Before dawn the day after Özer’s letter, police squads fanned out across Istanbul, and public prosecutors launched an investigation. Law enforcement arrested 62 people, including Thodex employees at all levels and Özer’s siblings, Güven and Serap. Interpol issued a red notice, requesting worldwide law enforcement to find and “provisionally arrest” Özer pending extradition to Turkey. Search teams deployed across Albania, Montenegro, Kosovo, and North Macedonia, following reported sightings and rumors. Albanian police even arrested people accused of aiding and abetting him. But Özer’s exact whereabouts remained unknown.
A Precarious Time for Crypto
Özer’s disappearance coincided with a particularly precarious time in crypto’s history. In the preceding weeks, so-called rug pulls—when a cryptocurrency exchange or altcoin developer absconds with investors’ funds—had left crypto investors around the globe flabbergasted. The CEO of Mirror Trading International, a South African crypto trading company, defrauded users of over $1 billion before skipping town. TurtleDex, an anonymous decentralized finance storage project on Binance, reportedly vanished with $2.4 million, while another decentralized finance project, Meerkat, allegedly fleeced investors out of $31 million (of which they paid back 95 percent). Blockchain analysis firm Chainalysis ranked rug pulls as the primary scam of 2021, accounting for 37 percent of all cryptocurrency scam revenue that year, up from 1 percent the year before.
Thodex Takes Center Stage
Thodex topped that roster, with nearly every major outlet from Bloomberg to Newsweek publishing headlines like “Turkish Crypto Exchange Goes Bust as Founder Flees Country” and “Turkish Cryptocurrency Founder Faruk Fatih Özer Seen Fleeing Country With Suspected $2 Billion From Investors.” CoinGeek called it “the biggest scam in the digital asset industry in 2021.” The New York Times‘ headline read, ”Possible Cryptocurrency Fraud Is Another Blow to Turkey’s Financial Stability.” In Turkey, people were reeling: For years, crypto had been touted—largely by Özer but by others too—as a way out of economic volatility. Now it seemed like just another way to lose one’s life savings. But something felt off, as if the whole story wasn’t being told.
The Making of Faruk Fatih Özer
Born in February 1994, Faruk was the youngest of three inseparable siblings: Güven, Serap, and himself. They grew up camping, playing video games, and cooking together, known for their shared sense of humor. Their parents, observant Muslims, ran a print and copy shop in the industrial port town of Kocaeli, down the street from their house. They gave their children meaningful names: “trust” (Güven), “mirage” (Serap), and “the one who distinguishes between right and wrong” (Faruk).
Kocaeli, surrounded by tobacco and sugar beet fields, petrochemical plants, and paper mills, once housed Roman emperors whose crumbling fortress walls still wind through the landscape. After the Ottoman Empire collapsed, Kocaeli became a manufacturing boomtown, its residents muscling the newly minted Republic of Turkey into the Industrial Revolution.
When Özer was born, Turkey’s economy was in a tailspin. A fragile financial system, irresponsible borrowing, and political corruption had triggered a brief period of triple-digit inflation. The lira’s volatility threatened the savings of its entire population, driving so many people to move their domestic assets to foreign-currency deposits that, by the end of the year, an astonishing 50 percent of bank deposits in Turkey were in a foreign currency.
The Rise of Crypto in Turkey: From Economic Turmoil to a New Era of Entrepreneurship
The Birth of a New Generation
In the year Faruk Özer was born, Turkey’s inflation rate soared to a staggering 70 percent. However, that same month, a charismatic orator named Recep Tayyip Erdoğan began campaigning through Istanbul’s streets, promising reform. In an upset election, he became the mayor of Istanbul.
The Silent Revolution
By 2003, Erdoğan was elected prime minister, ushering in a decade of unprecedented growth dubbed Turkey’s “Silent Revolution.” His pro-business rhetoric boosted the middle class and set Turkey on a path to European Union membership. Simultaneously, two Turkish business moguls launched Turkcell, the nation’s first mobile communication system.
The Entrepreneurial Spirit
Özer caught the spirit of entrepreneurship at an early age, working after-school shifts at his parents’ print shop. Determined to start his own business, he dropped out of high school after his second year.
The Gezi Park Protests and the Rise of Crypto
In 2013, activists gathered at Gezi Park in Istanbul to protest plans to redevelop it into a shopping mall. The brutal police crackdown sparked a nationwide movement, with more than 3 million people participating in demonstrations. Amidst the growing authoritarianism, crypto emerged as a new way for young people to protest and seek financial freedom.
The Tech Startup Boom
As tech startups took off around the world, Özer’s generation watched closely. Turkey’s mobile infrastructure and smartphone adoption rate became one of the fastest-growing in the world, laying the foundation for the next wave of entrepreneurship. The Özer brothers started their own companies, cranking out apps and games.
Economic Crisis and the Rise of Bitcoin
By 2017, Erdoğan’s unorthodox economic policies led Turkey into an economic crisis. As the value of the lira plummeted, citizens began searching for places to shelter their money. Coincidentally, 2017 was also the first year bitcoin’s value skyrocketed, and global trade volume surged.
The Birth of Thodex
Faruk Özer saw an opportunity in running a cryptocurrency exchange, which would allow people to invest in the blockchain without needing the time or skills to do so directly. With no regulations on running an exchange, Özer founded Thodex at the age of 23 with his own money.
Spreading the Gospel of Crypto
Using a playbook from Silicon Valley, Özer began promoting crypto around Turkey. He put up ads, installed Turkey’s first bitcoin ATM, and aired television commercials featuring Turkish celebrities. His efforts caught the attention of Turkey’s middle and upper classes, and soon, Özer was ingratiated into the upper echelons of Turkish society.
Istanbul: The Crypto Capital
Istanbul began to feel like Las Vegas, with dazzling billboards and banners hawking crypto coins everywhere. Backgammon cafés buzzed with crypto gossip, and signs appeared on barber shops and storefronts advising customers that they could pay with bitcoin. By 2020, Turkey had more people using cryptocurrency than almost anywhere else in the world.
The Rise and Fall of Thodex: A Cautionary Tale of Crypto in Turkey
From Mobile Gaming to Crypto Craze
Turkey has emerged as a hotbed for both mobile gaming and cryptocurrency adoption. The nation’s youth, in particular, have embraced crypto as a “national mindset,” according to Polat, a local expert. However, he cautioned that if everyone abandons the national currency in favor of crypto, it could have dire consequences for the world.
Thodex’s Meteoric Rise
In 2020, Thodex, a cryptocurrency exchange, moved into a sprawling high-rise in Istanbul’s Kadıköy district. Under the leadership of its young CEO, Faruk Fatih Özer, Thodex became the fastest-growing and second-largest crypto exchange in Turkey. Özer offered low commission rates, credit card purchases, and educational resources to attract new investors.
Global Ambitions and Red Flags
Özer secured a money services business license from the US Treasury’s Financial Crimes Enforcement Network, which he touted as proof of Thodex’s legitimacy. However, industry experts were puzzled by the company’s unsustainably low commission rates. By March 2021, 16 percent of people in Turkey were using crypto, placing the nation among the top five globally for crypto adoption.
Turkey’s Crypto Crackdown
In April 2021, Turkey’s Central Bank announced a ban on the use of crypto for purchases or services, sending shockwaves across the global crypto market. The bank cited concerns over potential losses and the undermining of confidence in the lira. Özer’s empire was under threat, and he launched a PR blitz to boost Thodex’s trade volume.
The Collapse and Its Aftermath
Days after the crypto ban announcement, Özer fled Turkey with a ticket to Tirana, Albania. Thodex’s 400,000 customers were left devastated, with many having invested their life savings and taken out loans to buy more crypto. Some investors attempted suicide, and at least two were reported to have died by suicide.
I believed in it. It had public credibility. It had a license. It had an office. Tax registration number. Employees. It checked out as a reputable company.
Victims formed online support groups, haunted by the mystery of Özer’s disappearance and the scale of the theft. Conspiracy theories emerged, with some speculating that Thodex was a money laundering scheme and Özer was merely a puppet.
The rise and fall of Thodex serves as a cautionary tale for the risks associated with the rapid adoption of cryptocurrency in countries with struggling economies. As regulators grapple with the challenges posed by this new asset class, investors must remain vigilant and informed to protect themselves from potential scams and losses.
The Mysterious Disappearance of Faruk Ãzer: A Crypto Scandal Unfolds
The Search for Answers
In the wake of Faruk Ãzer’s disappearance, vigilante programmers attempted to trace the blockchain to uncover the truth behind the missing funds. Was it the work of a lone individual, a criminal network, or a vulnerable system? Despite their efforts, the trail ran cold. As others focused on the money, I decided to pursue Ãzer himself. His profile reminded me of the young, ambitious, and sometimes ethically questionable founders I had interviewed in San Francisco during my time covering tech in 2013. Moreover, what aspiring fugitive would openly share their whereabouts and post letters from the road? Intrigued, I booked a ticket to Tirana, Albania, the last known location of Ãzer.
A Chilling Message
Two days later, my apartment in Istanbul was ransacked in a manner that seemed to convey a stern warning. The wood on my front door was forcibly split open, and the contents of every drawer and cabinet were strewn about. Surprisingly, expensive camera equipment, cash, and even a laptop on the entry table appeared untouched. The targeted nature of the intrusion compelled me to cancel my trip to Albania.
Rumors and Speculation
Nearly a year after Ãzer’s disappearance, there was no trace of him or the missing funds. Rumors circulated about his possible whereabouts, ranging from a hotel in Montenegro to a yacht off Kosovo or even a tropical hideaway in Thailand. Some speculated that he might be locked in a Tirana basement or even resting in a shallow grave. Meanwhile, Ãzer’s siblings, Güven and Serap, languished in prison, awaiting their brother’s capture to commence their trial.
The Investigation Unfolds
In March 2022, the findings of the investigation conducted by Istanbul’s public prosecutor and Turkey’s Financial Crimes Board were released. The report portrayed Ãzer as a calculating fraudster who exploited celebrity endorsements to lure people into funneling their savings into his criminal enterprise. According to the report, Ãzer founded Thodex in 2017 with the intention of operating it as a money laundering crime ring, with every employee, from top executives to call-center workers and social media managers, being complicit in the scheme.
The investigation traced numerous transactions through a complex web of financial accounts allegedly under Ãzer’s control. It revealed that approximately $8 million in Thodex-held assets had been cashed out in gold bricks in Malta just weeks before Ãzer’s disappearance. While Ãzer remained at large, his employees and family faced the possibility of lengthy prison sentences.
A Shocking Twist
Just as hope of Ãzer’s resurfacing began to fade, the drama took an unexpected turn. Sevgi Erarslan, a lawyer hired by Ãzer’s father initially to reimburse the victims and later to represent his son in absentia, made a startling announcement on Twitter. She claimed that she would refund any Thodex victims who legally withdrew their complaint against her client.
This development raised a flurry of questions. Where was this money coming from? Was Ãzer not only alive but also in contact with Erarslan while being sought by Interpol? I reached out to Erarslan via email, inquiring about the possibility of speaking with Ãzer. To my surprise, she called me immediately, indicating that Ãzer was willing to communicate. Thus began an intermittent correspondence, although doubts lingered about the authenticity of the responses and even Ãzer’s very existence.
The Trial Commences
Amidst a cloud of confusion and skepticism surrounding Ãzer’s whereabouts, the substantial payments being made to victims from undisclosed sources, and Erarslan’s legitimacy as his official lawyer, the trial proceeded. Of the 62 individuals initially arrested, 21 faced charges. On a gloomy July morning, officers escorted the defendants into Istanbul’s brutalist courthouse, located just a short distance from the Thodex headquarters where they had once worked.
Güven, dressed in a dark olive blazer with a neatly trimmed mustache, and Serap, wrapped in a trench coat over a midnight black abaya, took their places in the courtroom. Ãzer’s lawyer, Erarslan, donned Turkey’s traditional satin lawyer cloak and carried a Louis Vuitton purse. The sound of numerous handcuffs being unfastened reverberated through the expansive room.
As Güven’s name was called, he stood flanked by two court officers, their vests ironically bearing his name, which means “security” in Turkish. He asserted to the court that he had no official connection to Thodex, stating, “I only come to the office for tea with my siblings.” Güven explained how Thodex subcontracted his company for advertising services and admitted to allowing his brother to use his personal account at Faruk’s request. He corroborated Faruk’s claim that he was traveling to Albania to attempt to sell the company.
Serap, without acknowledging her brother, rose and explained her role as a mere accountant, responsible for forwarding documents to an accounting firm. Like Güven, she had provided Faruk with her personal crypto exchange and bank account information upon his request. “I didn’t think he was going to use it,” Serap stated. “I can’t say that my brother opened those fake accounts in my name. Identity theft is common; it could have been anyone.” As she spoke, her voice faltered, and she struggled to catch her breath. The head judge, twirling her pen, excused Serap from the stand when she began to stumble over her sentences.
Ãzer’s siblings and former employees recounted to the court how Ãzer had requested access to numerous accounts where he could personally initiate trades. To the prosecutors and likely many others in attendance, this appeared to be compelling evidence of money laundering.
When Ãzer’s name was called, Erarslan stood to testify on his behalf, brandishing a handwritten power of attorney and claiming to represent the absent CEO. The judge swiftly dismissed her, declaring the document invalid.
The courtroom erupted into chaos as one of the victims’ lawyers demanded Erarslan’s removal, prompting a heated exchange of shouts between them. The room devolved into a circus of slurs and accusations among judges, lawyers, victims, and defendants. One of the defendants’ lawyers even admonished the judge, exclaiming, “You need to know how crypto works. To have a fair trial, you have to understand how crypto works.”
The Arrest in Albania
Late one August night in 2022, just days before the defendants in Istanbul were to receive their verdicts, it became evident that Ãzer was indeed alive. Albanian police, who had been surveilling a BMW X5 suspected to be Ãzer’s, traced the vehicle to a stylish art-deco villa nestled in the hills of Vlorë, a luxurious tourist destination known as the Albanian Riviera.
The police pulled over just outside the driveway and waited. At 2:30 am, two individuals exited the house and entered the BMW, preparing to depart. The officers intervened, arresting the two young men, while a squad of police in bulletproof vests and balaclavas stormed the villa. Video footage of the raid captured a shirtless and visibly shocked Ãzer, wearing red shorts, stumbling around the room. Liquor bottles lined the shelves on the wall behind him. Three women were also present in the villa. An officer apprehended Ãzer, and the young CEO, now wearing a white polo shirt, was handcuffed, escorted down a short flight of stairs, and ushered into an unmarked white van, vanishing into the night.
During questioning at the police station in Tirana, Ãzer claimed to have been ”hiding in the streets of poor neighborhoods,” relying on his upbringing in a poor neighborhood in Turkey to navigate and blend in. He revealed that he had been subsisting on $10,000 in cash he had brought into the country, occasional wire transfers, and some cryptocurrency trading. Ãzer confessed to planning an eventual escape to Greece.
For nearly a year, Ãzer remained imprisoned in Albania, fighting his extradition back to Turkey. In a written correspondence with me, he expressed his belief that he would not receive a fair trial if extradited, describing the proceedings as “tragicomic.”
The saga of Faruk Ãzer and the Thodex scandal continues to unfold, leaving a trail of unanswered questions, shattered lives, and the enduring mystery of the missing millions. As the legal battle persists and the search for the truth goes on, the crypto world watches with bated breath, wondering if justice will ultimately prevail in this tangled web of deceit and betrayal.
The Downfall of a Tech Founder: Faruk Fatih Ãzer’s Astonishing Prison Sentence
In June 2023, Faruk Fatih Ãzer, a once-thriving tech entrepreneur, arrived at the Istanbul Superior Court to face a potential prison sentence spanning an incredible 43,000 years. With a shaved head and scruffy beard, the formerly exuberant founder now found himself in a dire situation.
Ãzer’s Courtroom Defense
Given the opportunity to present his case, Ãzer seized the moment, armed with a presentation reminiscent of a pitch deck. As his defense attorney navigated the slides, Ãzer passionately read from a 60-page soliloquy, asserting his innocence:
âI did not defraud anyone, I did not smuggle money abroad, I did not establish or manage a criminal organization,â he said with both frustration and sincerity in his voice. âI started a company.â
Acknowledging the harm caused to individuals, Ãzer argued that prosecutors and the media had erroneously criminalized a business failure. He cited various challenges, such as hacking incidents and a Dogecoin panic that drained Thodex‘s funds following the central bank’s drastic curtailment of crypto.
The Search for a Buyer and the Alleged Threat to Ãzer’s Life
Ãzer revealed that, upon realizing the company’s value exceeded its wallet funds, he sought to sell Thodex. He pursued potential buyers in Istanbul, Italy, and the Balkans, eventually setting up meetings in Albania. However, media reports claiming he had fled with $2 billion and defrauded 400,000 people deterred investors, leaving Ãzer unable to cover the losses.
In a startling revelation, Ãzer suggested that the news was circulated to endanger his life, portraying him as a vulnerable target in Albania, a country known for high crime rates. Fearing for his safety, he purchased a tent and retreated to the southern Albanian coastline, hoping to weather the storm until the truth emerged.
Ãzer’s Attempt to Make Amends
Learning of his siblings’ impending trial and the likelihood of them taking the blame for Thodex’s collapse, Ãzer devised a plan. With the help of his lawyer, Erarslan, he used the Thodex cold wallet to repay approximately 185 million lira ($10 million) to over 1,000 claimants. Once the wallet was depleted, Ãzer claimed to have discarded it in the Ionian Sea.
Defending His Actions and Asserting His Intelligence
Addressing the use of other people’s accounts for crypto trading, a central aspect of the case, Ãzer adopted a defiant tone. He argued that such practices were common among startup founders and that there was no irregularity or lawlessness in his actions.
As his address neared its conclusion, Ãzer’s frustrations turned to bitterness and hubris. He challenged the notion that someone with his alleged lack of intelligence could have deceived Turkish financial regulators for four years, boldly stating:
âI am smart enough to lead any institution on earth,â Ãzer said.
The Quiet Verdict
On a balmy Thursday in September 2023, the verdict was delivered in a nearly empty courtroom, marking the end of Faruk Fatih Ãzer’s tumultuous journey from tech founder to convicted criminal.
Image: ILLUSTRATION: PRINCESS HIDIR
5 Comments
Looks like the digital age heist movies don’t need to exaggerate anymore, huh?
Blockchain’s supposed to be secure, huh? More like a secure way to disappear with everyone’s money.
Well, someone took “cold storage” way too literally, didn’t they?
Guess it’s back to stuffing mattresses with cash, because who can trust banks or bytes now?
Talk about taking “keep your friends close and your enemies closer” to a whole new level with your wallet!