Thodex exchange founder sentenced to 7 months imprisonment over failure to submit tax documents

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Faruk Fatih Özer, founder of collapsed Thodex digital asset exchange, has been sentenced to seven months behind bars by a Turkish court over his failure to submit tax documents.

Özer founded Koineks in 2017 to capitalize on Turkey’s rising interest in digital assets. It later rebranded to Thodex as it expanded past its homeland and was the country’s largest exchange before its collapse. In 2021, the exchange abruptly halted its services, and Özer fled to Albania. He was arrested in 2022 and extradited to Turkey in April this year to face fraud charges and, later, tax evasion.

According to local reports, Özer has now been sentenced to seven months and 15 days behind bars for failure to submit documents requested by the Turkish Tax Inspection Board.

Özer was sentenced following a trial at the Anatolian 17th Criminal Court of First Instance. He maintained his innocence throughout the trial, claiming he couldn’t access the documents as the exchange had already been placed under a trustee.

The judge initially sentenced him to one year and six months in prison, but he later reduced the sentence considering Özer’s cooperation during the trial.

The 27-year-old is also on trial over fraud charges and still awaits the verdict. Prosecutors have accused him of defrauding $2 billion from close to 400,000 investors in the Thodex exchange. He maintains his innocence and claims he was framed.

In a recent hearing on the fraud charges, prosecutors demanded a sentence ranging from 12,000 to 40,400 years, making it the longest sentence for a financial crime in Turkey.

They accuse Faruk of “establishing an organization to commit a crime; fraud by using information systems, banks or credit institutions as tools; and laundering the assets of merchants or company managers and cooperative managers resulting from fraud and crime.”

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups— from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple,
Ethereum, FTX and Tether—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.