Thodex CEO Denies Rug-Pull, Discloses Cyberattacks, Says “Funds Are Safe”

The CEO of Thodex, a Turkish cryptocurrency exchange that abruptly halted trading on Wednesday, has denied accusations of a rug-pull and intends to return funds to investors shortly.

The real reason for halting trading and preventing withdrawals, CEO Fatih Faruk Özer said on Twitter yesterday, was to investigate suspicious abnormalities in 30,000 customer accounts discovered “during a three-month investment talk.” He did not say why the records were suspicious.

Özer added that the company is still recovering from a (previously undisclosed) cyberattack in April 2018 that drained 25 million Turkish liras (then around $6 million) from the exchange. The company's investigation, completed last week, found evidence of further cyberattacks.

This morning, Turkish police detained 62 people, seized the company’s computers and froze its bank accounts, and the government is preparing to have Özer extradited from Albania, where he fled two days ago.

Despite all of the ruckus, “no customer will be affected,” said Özer, claiming that the company holds funds equivalent to customers’ original deposits on the exchange.

Mertcan Bayraktar, who represents seven investors, including one person with 3 Bitcoin ($150,000) locked up in Thodex, told Decrypt that Özer also owes customers any profits they made trading crypto. “But admittedly, it’s better than receiving no money back,” he said.

Özer, who left the country the night before he shut down the exchange, said he would give back the funds upon his return to Turkey. Bayraktar said that there’s no reason to wait: “He’ll be detained upon arrival anyway.”

Kaan Savukduran, a trader who has approximately $12,000 in Dogecoin locked up in Thodex, told Decrypt: “They didn’t let us withdraw funds for a week, and they never provided customer support. They first halted trading citing six-hour maintenance, which they extended to five days citing an outside investment.”

“Don't I own the coins? I don’t get it!” he said.

Bayraktar expects his lawsuit against Özer will take a long time. “Crypto law in Turkey isn't even a grey zone," Bayraktar said. "It's more like black—there's no law governing it yet." Turkey banned crypto payments and legally acknowledged crypto assets last week, but the country has not published any regulations governing crypto assets.