How Thodex Changed Turkey’s Approach to Crypto
The sudden death of Faruk Fatih Özer, founder of the collapsed Turkish crypto exchange Thodex, has once again drawn attention to the massive fraud that not only devastated investors but also triggered one of the most significant overhauls of crypto regulation in Turkey’s history.
Özer, who was serving an 11,000-year prison sentence for orchestrating a $2 billion exit scam, was found dead in his prison cell on Nov. 1, reportedly by suicide. His demise marks the end of a saga that permanently altered how Turkey treats digital assets.
When Thodex abruptly shut down in April 2021, hundreds of thousands of users lost access to their funds. The ensuing chaos forced Turkish authorities to act swiftly, recognizing the need for a legal framework to prevent similar disasters. Within weeks, the Central Bank of the Republic of Turkey banned the use of cryptocurrencies for payments, citing the need to protect financial stability.
Soon after, the Financial Crimes Investigation Board (MASAK) expanded anti–money laundering (AML) and counterterrorism financing laws to cover crypto service providers, marking the first time digital asset firms were brought under the same scrutiny as traditional financial institutions.
By 2024, lawmakers introduced the Law on Amendments to the Capital Markets Law, a sweeping reform that created a licensing regime, reporting standards, and consumer protection measures for crypto exchanges. These provisions sought to prevent the kind of regulatory vacuum that allowed Thodex to operate unchecked.
The reforms also had geopolitical implications. Turkey, previously listed on the Financial Action Task Force’s “gray list” for weak AML controls, used these new laws to demonstrate progress in financial transparency. The country’s strengthened oversight helped pave the way for Turkey to position itself as a regional hub for legitimate crypto trading, while distancing itself from its scandal-ridden past.
According to Chainalysis’ 2025 Geography of Crypto Report, Turkey has since become the largest crypto market in the Middle East and North Africa, a remarkable turnaround given the industry’s near-collapse in 2021.
While Özer’s death closes a grim chapter in Turkey’s crypto history, the legal legacy of the Thodex scandal endures. What began as one of the world’s biggest crypto frauds ultimately forced the government to build guardrails around the industry — transforming a moment of national embarrassment into the foundation of a more regulated, resilient digital economy.
