The collapse of Turkey-based cryptocurrency exchange Thodex and subsequent death of its founder Faruk Fatih Ozer have become pivotal moments for digital asset regulation in Turkey. He had been sentenced to serve an unprecedented 11.196-year jail term after orchestrating one of Turkey’s biggest crypto fraud schemes, according to authorities, before his body was discovered dead in his prison cell on 1 November 2025 (DL News +4 Yahoo Finance +4 The Economic Times).
A combination of factors led to its collapse and subsequent crime spree: economic downturn and crimes committed during its aftermath.
Thodex was established in 2017 and became one of Turkey’s fastest-growing crypto platforms before it abruptly stopped trading and withdrawals in April 2021, locking out hundreds of thousands of users and leaving an estimated loss between US$2 and US$2.6 billion, depending on estimates by analysts firms or Turkish media reports. (Thodex has since been delisted from Turkish Stock Exchange). [Sources: Economic Times + Wikipedia
Olu Ozer fled Turkey for Albania shortly before his exchange’s shutdown and was later extradited back for trial in September 2023, along with his siblings for crimes including fraud, money-laundering and leading a criminal organization (Wikipedia +2 | CoinLaw +2). They were found guilty on all three charges. Toward the end of September, these crimes included aggravated fraud, money-laundering and leading a criminal organization (Wikipedia +2 | CoinLaw).
Questions over his death remain.
While initial findings by Turkish authorities indicate Ozer’s death may have been intentional, an official investigation remains open and ongoing, according to The Economic Times.
Victims’ lawyers have raised concerns over transparency and suggested that the death impedes asset recovery efforts while undermining public trust in justice systems. DL News. +1 for additional legal and regulatory ripple effects.
The Thodex affair may leave its greatest legacy not just through criminal proceedings but in how it reshaped Turkey’s crypto-regulatory regime:
Soon after the collapse of Thodex, in April 2021, the Central Bank of the Republic of Turkey (CBRT) issued an announcement banning cryptocurrency payments as well as prohibiting payment service providers from providing fiat-to-crypto on-ramps. For this reason, TradingView no longer supported cryptocurrency as payment option.
In May 2021, the Financial Crimes Investigation Board (MASAK) amended anti-money-laundering and terrorism-financing laws to specifically cover crypto assets and virtual asset service providers.
Wikipedia
Beginning in 2025, Turkey implemented additional measures, such as requiring user-identification for crypto transactions above certain thresholds and restricting stable-coin transfers as well as postponing withdrawals in certain cases.
These reforms represent a marked departure: Turkish cryptocurrency platforms can no longer operate unchecked. The Thodex case demonstrated how loose regulation could increase systemic risk — particularly in an environment of high inflation and economic uncertainty.
Why it Matters
For Turkish authorities, this scandal was both a reputational setback and a wake-up call. It illustrated just how vulnerable consumers could be without oversight — and how large-scale scams like these can have far-reaching repercussions for financial stability. Furthermore, for the crypto market as a whole, it serves to stress the importance of regulation, custody safeguards, and corporate governance policies in digital-asset platforms.
What Comes Next
While Ozer’s death may close one chapter of Thodex, its regulatory chapter remains an active one. Authorities will likely increase efforts to licence exchanges, enforce compliance standards and safeguard investor protections to both prevent another collapse from happening and rebuild trust within Turkey’s digital-asset ecosystem. At the same time, victims of Thodex continue their pursuit of asset recovery, civil claims or compensation despite his passing and dispersal of assets.
Conclusion With the demise of Thodex and death of its founder, Turkey is experiencing its most dramatic crypto fraud scandal to date — and an abrupt change to how regulators, investors and market participants view, regulate and monitor cryptocurrency. Investors, regulators and market participants now understand: days of unchecked hype without oversight have come to an end.
