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

Cryptocurrency exchange Thodex announced a temporary suspension of activities, citing “abnormal movements of funds” in its accounts as the reason. The CNBC news outlet reported that the founder and CEO of the site, Faruk Fatih Ozer, fled to Albania, taking 2 billion client money. Thousands of investors who were clients of the exchange cannot understand what happened to their funds.

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

A lawsuit was filed against the CEO of the exchange, which was used by 400,000 clients, but Ozer, on his page on the social network Twitter, considered the allegations unfounded. According to his statement, clients' money remained in place, and the exchange had to be shut down due to a cyber attack. However, this did not convince the local police and the fugitive was put on the international wanted list, another 62 people were arrested on suspicion of fraud.

The case when the owners of crypto-exchanges disappear with the money of clients is far from isolated. In 2019, there was a message about the death of 30-year-old Gerald Cotten, who led the QuadrigaCX exchange. His widow, Jennifer Robertson, testified that users' funds were stored primarily in a cold wallet that only Cotten had access to. The exchange had $190 million in client funds at its disposal, most of which was transferred to other exchanges and used to buy real estate and luxury goods for the unscrupulous owner shortly before his death. There was a version that Gerald staged his own death, but his fate is still unknown.

Many will remember the high-profile incident with Mt. Gox, in which users lost 850,000 BTC, but in that case, the cause was the largest hacker attack in the history of crypto exchanges. The 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 is still present.

Top 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.