Thodex Founder Sentenced to Turkish Prison over Failure to Tender Tax Documents

Faruk Fatih Özer, the fugitive Founder of the defunct Turkish cryptocurrency exchange, Thodex who was extradited to Turkey earlier in April, has been sentenced to seven months and 15 days in prison. The local outlet, Hürriyet Daily News reported today (Tuesday) that the former CEO of Thordex received his sentence for failing to submit certain documents demanded by the Turkish Tax Inspection Board.

Turkish Court Slams Jail Term on Thodex ex-CEO

On October 30, 2021, the Board issued a notification to Özer to submit certain documents related to his business. However, the crypto entrepreneur failed to hand the documents over.

During a hearing on the case at the Anatolian 17th Criminal Court of First Instance, the Founder of Thodex claimed that he was not in possession of the requested books when the notice was issued as the exchange was run by a trustee during the period. As a result, he argued, he was not a company official at the time.

Meanwhile, prosecutors in the case accused Özer of ‘smuggling’ under the Turkish Tax Procedure Law, according to Hürriyet. While they initially sought a prison term of up to five years, the court settled for a year and six months before finally deciding on seven months and 15 days. The reduction was hinged on Özer’s social relations and conduct during the trial, the outlet reported.

On top of this, the court opted to defer the enforcement of the sentence. However, Özer continues to face allegations that he defrauded the investors of Thodex.

Thodex's Founder Denies Wrongdoing

The defunct cryptocurrency exchange platform halted trading and withdrawals in April 2021 and subsequently went silent, causing about $2 billion in losses to nearly 391,000 customers. Turkish police authorities later launched a large-scale investigation into the platform.

After Thodex went dark, Özer fled Turkey but was later arrested in Albania in August last year, following a red notice issued by the International Police.

Turkish prosecutors have accused Özer and other Thodex executives of establishing a criminal organization where they were engaging in fraud through informatics systems and laundering proceeds from criminal activities. They are also seeking jail sentences of up to 40,564 years against 21 of the exchange’s founders and executives, Finance Magnates reported.

However, Özer has denied any wrongdoings and claims that he is being framed. The Thodex Founder made his first defence against the charges during a hearing held earlier on June 12, according to the local media outlet.

Turkey remains one of the top jurisdictions across the world with strong demand and interest in digital assets. The transcontinental country ranks 12th on blockchain-based data company, Chainalysis' 2022 Global Crypto Adoption Index Top 20.

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