The owner of one of the Turkish crypto-exchanges escaped with $2 billion. How to properly store cryptocurrency

The cryptocurrency exchange Thodex announced a temporary suspension of operations, citing “abnormal movements of funds” in its accounts as the reason. CNBC reported that the platform’s founder and CEO, Faruk Fatih Ozer, fled to Albania, taking $2 billion of customer funds with him. Thousands of investors who were clients of the exchange cannot understand what happened to their funds.

The official Thodex website states that the cryptocurrency exchange has suspended operations until the circumstances are clarified. At the same time, photos of the CEO leaving Istanbul airport have appeared on the Internet.

A lawsuit was filed against the CEO of the exchange, which had 400,000 customers, but Ozer considered the allegations unfounded on his Twitter page. According to him, the customers’ money remained intact, and the exchange had to be shut down due to a cyberattack. However, this did not convince the local police, and the fugitive was placed on an international wanted list, with 62 other people arrested on suspicion of fraud.

Cases where crypto exchange owners disappear with their customers’ money are far from rare. In 2019, news broke of the death of 30-year-old Gerald Cotten, who headed the QuadrigaCX exchange. His widow, Jennifer Robertson, claimed in her testimony that user funds were stored primarily in a cold wallet, to which only Cotten had access. The exchange had $190 million in customer funds at its disposal, most of which were transferred to other exchanges and used to purchase real estate and luxury items for the unscrupulous owner shortly before his death. There was a theory that Gerald faked his death, but his fate remains unknown.

Many will recall the high-profile incident involving the Mt. Gox exchange, in which users lost 850,000 BTC, but in that case, the cause was the largest hacker attack in the history of crypto exchanges. KuCoin and Eterbase platforms were also hacked.

In 2016-2017, there were many positive changes in the cryptocurrency industry that can protect investors’ funds from theft. However, the possibility of fraud still exists.

Key tips on how to protect cryptocurrency:

• One of the main advantages of blockchain technology is transparency. Such large amounts cannot go unnoticed during transfers, and their owner will face the problem of withdrawing money to a third-party exchange. For example, Turkish government authorities recognize the transaction as illegal and enter the wallet into a special register. After transferring even a part of these funds to a legitimate site, they will be frozen there.
• Experts advise choosing decentralized services or services with high trust. The longer the service has been on the market, the better the professional reputation, the less likely it is to fall for the bait of attackers. One of these services is Coin24.io. For more than 10 years on the market of electronic currencies and cryptocurrencies, we have learned to provide high quality service and have earned a reputation for being reliable and safe for clients' funds.
• There is no 100% way to protect a bitcoin wallet from scammers, the risk of being deceived is always present. But it is possible to minimize it. Cryptocurrency exchange is a rather risky instrument. The universal way to protect yourself is not to store funds on them and choose local wallets. Money that is not actively used at the moment should be better transferred to s.c. ‘’cold wallets’’ that are not on your device. The only risk in this case will be the loss of a bitcoin wallet.

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