December 6, 2023

The founder and former CEO of the now-defunct Thodex cryptocurrency exchange has been sentenced to seven months in prison for failing to file relevant documents requested during the trial.

Turkish prosecutors initially sought a maximum five-year prison term on smuggling charges under the country’s Tax Procedures Law.

protracted court case

Thodex is one of the most famous cryptocurrency exchanges in Türkiye. However, the exchange suddenly closed, Farouk Fatih OzerThe exchange’s CEO fled to Albania. Ozer was deported back to Turkey after an Interpol red notice and faced fraud charges for pocketing more than $2 billion in client funds when Thodex shut down. The CEO and 21 other defendants face charges including fraud, money laundering and using Thodex to operate a sophisticated criminal network. If convicted, Ozer could face longer and harsher punishment.

Ozer stays innocent

The case was heard at Anatolia’s 17th Criminal Court of First Instance, where the magistrate initially sentenced Ozer to a year and a half in prison. But the court reduced the sentence after taking into account his social connections, behavior and potential impact on his future. During the trial, which began in October 2021, Ozer has maintained his innocence. Turkish authorities required the former chief executive to submit documents related to his activities at Thodex to the tax inspection board.

However, Ozer failed to submit the required documents within the allotted time. Instead, he has denied the allegations, claiming he was set up and saying the company was hacked. He also denied being a Thodex official at the time, claiming that a trustee had been appointed to oversee the exchange and operations in his absence, preventing him from sharing the requested records. Ozer It also maintains that the former employee arrested in 2021, including his siblings, was falsely imprisoned.

problems continue to grow

Ozer faces a number of other charges, and the former CEO could spend the rest of his life in prison. Prosecutors and investors insist he played a key role in the collapse of the Thodex exchange. todex In 2021, the platform suddenly stopped all services, causing the platform to crash. As a result, more than 400,000 customers were unable to withdraw funds, and prosecutors allege Ozer stole more than $2 billion in customer funds. However, after more than a year on the run, he has been detained in Albania, where Albanian and Turkish officials are negotiating his deportation.

Officials initially sought five years in prison for Ozer under the country’s strict tax procedure laws.

Tax evasion is a major problem

According to a study by Swedish cryptocurrency tax firm Divly, 99.5% of cryptocurrency investors do not end up paying taxes in 2022. The report states that Finland has the highest number of investors who pay the necessary taxes on their cryptocurrency investments, a figure of just over 4%. Australia and Austria followed with 3.65% and 2.75% respectively, followed by Germany, the UK, Norway, Japan, Sweden, Canada and the US. Lower-ranked countries such as India, Indonesia, and the Philippines will only pay 0.07%, 0.04%, and 0.03% of cryptocurrency investors paying taxes in 2022.

However, the report has also received its fair share of criticism, with many questioning the methodology used for the estimates mentioned in the report. The report itself notes that search volume data may not accurately reflect the actual number of taxpayers in the crypto ecosystem.

Disclaimer: This article is for informational purposes only. It does not provide or be intended to be used as legal, tax, investment, financial or other advice.