Betrayed trust: crypto founders who stole investors’ money

As the digital currency world expands, so does its dark side, with billions of dollars falling into the hands of hackers, scammers, and even trusted founders.

The crypto industry, known for its lack of clear regulation and wild price swings, once seemed rife with potential scammers looking to steal from the unwary. While steps are being taken to provide regulatory clarity for crypto worldwide, price volatility and theft are still concerning issues.

In 2022 alone, data from Chainalysis shows that bad actors made off with more than $3.8 billion in crypto, most of it stolen from decentralized finance (DeFi) protocols by North Korea-linked attackers such as the Lazarus Group.

The amount was a 15% increase over 2021 when records show hackers and scammers stole about $3.3 billion worth of digital assets.

In the first quarter of 2023, 57 cases of crypto theft were reported, with extrapolations of those figures suggesting there could be as many as 228 incidents by the end of the year.

Hacks account for a large portion of the money lost in the digital asset industry, but cases of crypto founders and developers absconding with users’ funds have become quite prevalent.

Such thefts usually take the form of rug pulls, where developers abandon projects midway and flee with investor funds. Ponzi schemes are also popular for malicious crypto founders to steal money from unsuspecting crypto investors.

In this article, we’ll explore several incidents where those entrusted with keeping user funds safe betrayed that trust and stole millions of dollars worth of crypto from their customers.

Faruk Fatih Özer (Thodex)

Faruk Fatih Özer, the founder and former CEO of Thodex, one of Turkey’s largest cryptocurrency exchanges, has become notorious in the global crypto industry.

Özer formed Thodex in 2017 as Koineks Teknoloji, making it the fourth crypto exchange in Turkey. The company went global in 2020, changing its name to Thodex in March.

It also allegedly received a “license” to operate as a Money Service Business (MSB) from the U.S. Financial Crimes Enfo

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Author: Julius Mutunkei

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