- Thodex abruptly closed down this month, leaving customers locked out of their accounts.
- Whitestream believes the exchange has been siphoning off users' Bitcoin for months.
Between August 2020 and February 2021, roughly 5,000 worth an estimated $125 million at the time of trading (and over $280 million in today’s value), left wallets owned by now-shuttered Turkish exchange Thodex and landed in US exchange , according to Israel-based tracking firm Whitestream.
Whitestream, which has contracts with the Israeli Defense Ministry, said it appears to be a “Thodex cash out operation.” In other words, Thodex execs may have been stealing Bitcoin from their customers, before laundering it and sending it to Kraken for retrieval.
Thodex abruptly shut down operations this month with what a lawyer involved in the case estimated to be at least $2 billion in customer funds inside. Turkey Interior Minister Süleyman Soylu later downgraded the estimate to about $108 million. As Whitestream CEO and co-founder Itsik Levy pointed out to Decrypt, that’s not far off from the $125 million estimate his firm has produced, based on an average price of $25,000 from August to February.
According to Levy, a cluster of Bitcoin wallet addresses controlled by the same group—in this case, Thodex—sent BTC through an intermediate cluster of wallets, which then sent those to their final destination, with the overwhelmingly majority landing at Kraken.
“The bottom line is that Kraken received [a] huge amount of Thodex customers’ Bitcoin,” Levy told Decrypt.
When asked if there could be an honest explanation for this, Levy said, “Only if Thodex operated their entire financial activity through Kraken...but it is very weird.”
A spokesperson for Kraken told Decrypt: "Kraken sympathizes with the Thodex customers hurt in this fraud. Fraud and security issues like this tarnish the whole industry. We take theft allegations very seriously. Kraken uses layers of identity verification and fraud prevention safeguards. The information provided by Whitestream isn’t sufficient to act on and we hope they contact us to provide more information privately."
Turkey last week detained over 60 people in connection with Thodex’s apparent exit scam, while also seizing computers and freezing the company’s bank accounts.
On Thursday, it jailed another six people in connection to suspected fraud at Thodex, including family members of CEO Faruk Fatih Ozer, who fled to Albania immediately before the exchange announced it had closed down. Turkey has reportedly asked for Ozer’s arrest. Ozer claims that the exchange’s troubles are linked to cyberattack rather than fraud.
This article has been updated to include comments from Kraken.