Turkey has detained dozens it says are involved in an alleged €1.9 billion cryptocurrency fraud

Turkish police have detained 62 people as part of an investigation into a cryptocurrency exchange that is being accused of defrauding investors, according to the country’s state-run news agency.

Anadolu news agency said on Friday that prosecutors had issued detention warrants for 16 more people linked to the Thodex cryptocurrency exchange and said the detentions took place in eight provinces.

On Thursday, Istanbul’s chief prosecutor’s office announced it was probing Thodex following complaints from users who could not access their assets. It is thought to have affected some 391,000 investors and an estimated $2 billion (€1.9 billion) in investments.

Thodex owner Faruk Fatih Ozer denied the allegations in a statement on Twitter and said the company was being targeted by a smear campaign.

'Claims untrue'

He said the company temporarily shut down trading after accounts showed unusual activity due to a cyberattack. Ozer also said the claims that the money had disappeared were untrue.

The justice ministry said it was seeking Ozer's extradition from Albania, according to Anadolu, after Turkish media reports said he had left the country earlier this week. Ozer confirmed he was abroad but claimed the trip was to meet foreign investors.

Last week, Turkey’s central bank announced that it was banning the use of cryptocurrencies for the payment of goods and services, arguing that they presented "irrevocable" risks.

It also cited the use of cryptocurrencies in "illegal actions due to their anonymous structures," and their possible use "illegally without the authorisation of their holders".

The decision came as many in Turkey have turned to cryptocurrencies to shield their savings from rising inflation and the Turkish currency’s slump.