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A visible illustration of the cryptocurrency Bitcoin on November 21, 2020 in London, England.
Jordan Mansfield | Getty Images
LONDON — A Turkish cryptocurrency exchange is offline and its CEO has reportedly gone missing, leaving hundreds of traders nervous that their funds have been stolen.
Thodex, a crypto platform based mostly in Turkey, mentioned its platform has been “temporarily closed” to handle an “abnormal fluctuation in the company accounts,” in response to a translated assertion on its web site.
Local media reviews say that Faruk Fatih Ozer, Thodex’s founder, has flown to Albania, taking $2 billion of traders’ funds with him. Demiroren News Agency published a photograph of what it mentioned was Ozer leaving Istanbul Airport.
A lawyer who filed a prison grievance in opposition to Ozer mentioned Thodex had 400,000 customers, of which 390,000 had been lively. However, Ozer has disputed the allegations, saying solely 30,000 customers have been affected by the state of affairs and that reviews about $2 billion of losses are “unfounded.”
According to Anadolu Agency, Turkish authorities have now issued a global warrant in search of Ozer’s arrest. Police have detained 62 individuals in eight cities together with Istanbul, the state-run information company mentioned.
Thousands of Thodex customers have filed complaints in opposition to the corporate, with traders saying they’re unable to entry their accounts and fear that their financial savings could also be irretrievable. Some Turkish residents have turned to crypto as a approach to shield their financial savings from skyrocketing inflation and the weakening of the Turkish lira.
According to Bloomberg, Thodex final month supplied new registrants thousands and thousands of free dogecoins. The exchange reportedly mentioned 4 million of the meme-inspired crypto tokens had been distributed however many customers say they have not obtained them.
Thodex was not instantly accessible for remark when contacted by CNBC through Twitter.
Crypto crackdown forward?
It’s a reminder of the regulatory uncertainty surrounding the crypto trade. Though some nations are introducing guidelines aimed toward bringing crypto companies beneath their supervision, the trade lacks the extent of scrutiny seen in additional established monetary markets.
In 2019, Canadian crypto exchange QuadrigaCX went bankrupt after its CEO died, leading to thousands and thousands of {dollars}’ value of digital belongings being trapped in a digital pockets.
Turkey’s central financial institution lately banned the use of cryptocurrencies for buying items and providers. President Recep Tayyip Erdogan has known as for swift regulation, warning of “pyramid schemes” rising within the crypto markets.
Meanwhile, Britain’s monetary providers watchdog warned in January that crypto traders “should be prepared to lose all their money” as a result of “very high risks” related to them.
Bitcoin and different cryptocurrencies are decentralized, which means they don’t seem to be managed by a single particular person however a community of computer systems. The entire concept of bitcoin initially was for individuals to be their very own financial institution and maintain cash exterior of the normal monetary system.
Crypto traders imagine the trade has matured a terrific deal through the years, nevertheless. Bitcoin’s value has climbed greater than sixfold during the last 12 months, even after a pointy plunge in costs lately. And bitcoin bulls hope that the doorway of institutional traders and firms like Tesla to the market will assist transfer cryptocurrencies into the mainstream.
Nonetheless, volatility in digital forex costs and a possible regulatory clampdown are large dangers for the trade. Jesse Powell, CEO of U.S. exchange Kraken, instructed CNBC earlier this month that he thinks there “could be some crackdown” on cryptocurrencies.
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