FACT CHECK: Afriq Arbitrage System was not built using blockchain technology, here’s how the $87m scam worked

Temitope Akintade
Afriq Arbitrage System

The internet is rife with reactions and comments on a particular individual, who allegedly ‘hacked a blockchain’ of his company, Afriq Arbitrage System and made away with at least $87 million. 

The suspect, Abayomi Segun Oluwasesan, was arrested last week by operatives of the International Criminal Police Organization (INTERPOL) in Nigeria after hacking the blockchain of Afriq Arbitrage System, a company where he worked, per reports over the weekend. 

However, a deeper look shows that the whole hacking issue is not what it seems.

Afriq Arbitrage System does not have a blockchain. 

First, a quick check at the Afriq Arbitrage System website, which was branded as a ‘global crypto space’ by Instablog, shows that the business was nothing more than an investment scheme, with no traces of any private or public blockchain. 

Read also:

3 ways to identify crypto arbitrage opportunities 

Apart from the fact that the name or details of the founders/executives of the platform are not visible on the website, it claims to be  a ‘Colorado Limited Liability Company.’ 

Also, it displays a ‘certificate of good standing’ on its website, which it claims to have gotten from the office of the Secretary of State, Colorado. 

However, a deeper look shows that this is all a hoax. A verification on the State of Colorado, United States business database website, where it claims to be registered as a limited liability company and where it purportedly got its certificate of good standing from, shows that a certain Morgan Noble registered it in July 2022 and was also voluntarily dissolved within two days – around July 5 – 6.

Checks on Afriq Arbitrage System
Checks on Afriq Arbitrage System

What can be deduced from this is that the elements behind the Afriq Arbitrage System used an unsuspecting agent/individual based in the United States to apply for a license. 

However, it is unclear why a Nigerian-based company decided to be registered in the United States without a license in Nigeria, where it operates.

On the website, Afriq Arbitrage System styles itself as the ‘best investment platform’:

AFRIQ ARBITRAGE SYSTEM is a digital currency service platform that uses high frequency trading and algorithms to automatically buy digital currencies at lower prices and sell them at higher prices to generate returns.”

This implies that Afriq Arbitrage System claims that it places automated transaction orders for investors and pays them a return on investment (ROI). According to the website, AAS uses a high-frequency transaction mode to make profits on price differences, whether the market is bullish or bearish. 

“This small difference between buy and sell orders in milliseconds is swiftly collected and processed by the high-frequency technology, ensuring stable profits for customers all day long.”

It boasts that:

For individuals and institutions who want immense benefits from the digital currency market, AAS high-frequency technology is a model par excellence.”

All these are pointers to Afriq Arbitrage System being an elaborate Ponzi scheme.

On how it works, ‘investors’ are to create an account “provided to you by the person who introduced you”. Then, to fill out a form, deposit USDT and ‘the system will trade automatically for you 24/7.’

Checks on Afriq Arbitrage System

With no demonstrable backing of a public/private blockchain where transactions or activities of Afriq Arbitrage could be verified, one would wonder where the ‘hacking of blockchain’ narrative sprung up from.

Another school of thought 

With many reactions trailing the report, there have been a few controversial takes, but one that stands out is from one @akinurguy, a Twitter user who claims that the whole blockchain hacking system is a charade by Jessem Micheal, the owner of  Afriq Arbitrage System, to abscond with investors funds.

He claims that AAS is an outright scam, a Ponzi scheme that claimed to have been affiliated with Binance liquidity pools to generate income. Note that this contrasts with what is obtainable on the website, which claims that it generates income with an arbitrage system that trades price differences.

Further checks also show that Binance Africa denounced any form of affiliation with the Afriq Arbitrage System in May this year. 

Binance Africa warms users from Afriq Arbitrage System

In the tweets, BinanceAfrica further warned unsuspecting investors to stay clear of AAS. 

Read also:

Pi Network under investigation for fraud in Vietnam 

According to @akinurguy, the Abayomi Segun that was arrested and Jessem Micheal planned it together, and the former might not even use up to 6 months in detention. 

In conclusion

Amidst all the claims, half-baked evidence and conjectures, a single truth that has been established is that there are no traces of a blockchain-backed system on AAS. 

The Afriq Arbitrage system is an investment platform at best and a Ponzi scheme at worst. Available data has shown that there was no blockchain it was running on, so the calls that it was actually a grand scam might not be far from the truth.

This is a developing story

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