During bull runs like we are currently experiencing, there are many new investors enter the cryptocurrency markets to take advantage of this opportunity. While lots choose trustworthy trading platforms such as Bitlevex, others aren’t that lucky.

Over the years, the cryptocurrency space has often been a target of hacks and exit scams. The decentralized nature of crypto makes it difficult for authorities to track the scammers, leaving investors with a total loss of funds.

In this article, we will have a quick overview we will explore the reason behind these scams and will delve deeper into the latest Thodex scam that shook the market in April 2021.

Why are cryptocurrencies a target for scammers?

Where are we in the crypto world

Today, it is estimated that more than $7 billion worth of cryptocurrencies has been stolen since 2011 by hackers and scammers.

Cryptocurrency exchanges are a prime target, as they often hold the keys that grant access to enormous amounts of cryptocurrencies on their servers. You see, unlike cryptocurrency wallets, which are virtually unhackable, crypto exchanges hold the keys to the hot wallets on their servers. These can be accessed by malicious actors and once they get ahold of the keys, they can steal the user’s crypto in whole impunity.

An important point here is that, once users deposit their coins on an exchange, they lose control over their crypto. The exchange becomes the custodian of these funds and can deny access to your coins if they feel you have breached their terms of service.

What are exit scams?

The Acceptance of Cryptocurrency is Growing

But in addition to hacks, crypto exchanges have been known for their exit scams as well. An exit scam is when the company or team that controls the exchange “pulls the plug” on the exchange.

The exchange stops functioning and the users are unable to withdraw their funds. Unfortunately, this often means that the exchange either went broke or that the founders took off with the user’s funds.

In either case, the result is the same – total loss for those that have deposited their crypto, with little to no legal instruments to recover their investment.

Thodex – the latest Turkish exchange scam

Thodex - Everything You Should Know About The Turkish Crypto Exchange Scam

Unless you’ve been living under a rock during the past few weeks, you must have heard about the latest exit scam orchestrated by the Thodex CEO, Faruk Fatih Özer.

Thodex, a cryptocurrency exchange based in Istanbul ceased operations last week, stating the bad crypto climate in the country as the reason for their inability to carry out business.

While this could have been a viable reason for such an announcement, it was the aftermath that rose many red flags. Being one of the largest crypto exchanges in Turkey, hundreds of thousands of users of the exchange were suddenly unable to access or withdraw their crypto holdings.

The exchange came out with a lackluster announcement that the closure would only last “a few days”, but things were looking more problematic as time went by.

The 27-year old founder fled to Tirana, Albania triggering an international manhunt to recover the 2$ billion of stolen funds from 390.000 exchange users.

Additionally, 77 people have been arrested in relation to the case, giving a glimmer of hope to the damaged investors.


Cryptocurrency exchanges are a convenient way to enter the cryptocurrency market and make some profits. However, using them requires a fair amount of caution on your part.

Once you transfer your funds to a crypto exchange, you are no longer in possession of your holdings. As such, we recommend you never leave substantial amounts of crypto on an exchange wallet, and especially not for extended periods of time.