The founding brothers of South African, cryptocurrency investment platform Africrypt have reported vanished along with investors’ Bitcoin worth $3.6 billion.
According to Bloomberg, a law firm in Cape Town hired by investors says the company’s website is down and it can’t locate Ameer and Raees Cajee, the founders of the investment platform.
It added that repeated calls to the mobile number for Cajee and Raees were immediately directed to a voicemail service.
Crypto’s biggest heist?
From reports gathered, Africrypt was setup by the brothers in 2019 and it provided bumper returns for investors.
However, the first signs of trouble showed in April as Bitcoin was rocketing hitting new price highs. The company’s Chief Operating Officer, Ameer Cajee, informed clients that Africrypt had been hacked.
He then asked them not to report the incident to lawyers and authorities, as it would slow down the recovery process of the missing funds.
However, some investors hired the law firm, Hanekom Attorneys to look into the matter. On investigation, the firm discovered that Africrypt’s pooled Bitcoin was transferred from its South African accounts and client wallets.
“We were immediately suspicious as the announcement implored investors not to take legal action. Africrypt employees lost access to the back-end platforms seven days before the alleged hack.”Hanekom Attorneys
It added that the coins went through tumblers and mixers or to other large pools of bitcoin to make them very difficult to change.
After the discovery, the founding brothers were completely unreachable. The firm cited foul play as the Africrypt employees reportedly lost access to the back-end platforms seven days before the alleged hack.
With the surge in Bitcoin’s value since the beginning of the year, the disappearance of about 69,000 coins will have been worth more than $4 billion at their April peak. This would mean that the alleged heist is the biggest-ever dollar loss in a cryptocurrency scam in history.
Government hands are tied
The Africrypt scam isn’t the first in South Africa. Nor were previous episodes minor. Last year, Crypto investors in the country lost millions of dollars when another South African Bitcoin trader, Mirror Trading International collapsed.
The losses reportedly involved about 23,000 digital coins worth about $1.2 billion. According to Chainalysis, it was the biggest crypto scam of 2020.
Africrypt investors stand to lose three times as much as Mirror Trading International investors
Following the Mirror Trading scam, the South African government kickstarted plans to regulate the space. However, the regulations have not been enforced.
The latest incident could spur regulators’ efforts to impose order on the market. But as things stand, the government’s hands are tied in prosecuting the Africrypt scam.
According to the regulator’s head of enforcement, Brandon Topham, South Africa’s Finance Sector Conduct Authority is also looking into Africrypt, but it is currently prohibited from launching a formal investigation because crypto assets are not legally considered financial products.
The law firm has also reported the matter to the Hawks, an elite unit of the national police force. And also told crypto exchanges across the globe should any attempt be made to convert the digital coins.
Crypto investment in South Africa and Africa, in general, is growing. In January, the daily value of crypto-asset trading exceeded 2 billion rands ($141 million) for the first time in the country.
However, with the growing number of scams in the country, regulators now have more reasons to put a strong regulatory blanket on the industry.
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