AfriCrypt, a South African investment company, has reportedly defrauded investors of $3.6 billion in Bitcoin funds. The two brothers and founders of the investment platform have now fled the country,
Two brothers named Ameer Cajee who acted as the Chief Operating Officer (COO) and Raees Cajee who acted as the Chief Executive Officer (CEO) had set up Africrypt in 2019 and it provided bumper returns for investors.
Africrypt provided all-around solutions, including investment opportunities on cryptocurrency and blockchain technology; brokerage services proffering an electronic, off-exchange digital liquidity solution; payment services providing secured digital payments across the domestic, offshore and international market; and full-suite consulting and advisory services for merchant banks and services for the digital world.
The South African police force, Hawks, was alerted after a Cape Town law firm Hanekom Attorneys, hired by investors said they were unable to trace the two brothers. It further told other cryptocurrency exchanges around the world if the brothers try to convert the digital coins to cash.
The company website was taken down and the publication was unable to reach neither of the brothers through calls.
The signs of trouble started in April when Cajee, the elder brother, said that the company had become a victim of hacking and asked the clients not to report the incident to the authorities claiming it would decelerate the process of recovery of missing funds.
Some sceptical investors did not listen to the request not to alert authorities by the COO and contacted a law firm, Hanekom Attorneys while another group of investors started liquidation proceedings against Africrypt. The law firm said they could not locate the brothers and reported the matter to the Hawks, an elite unit of the national police force.
Cryptocurrency exchanges across the globe have also been alerted should any attempt be made to convert the digital coins to cash.
The law firm stated, “We were immediately suspicious as the announcement implored investors not to take legal action,” in response to emailed questions.
Africrypt employees lost access to the back-end platforms seven days before the alleged hack. The investigation conducted by Hanekom Attorneys found out that Africrypt’s pooled funds were transferred from its South African accounts and client wallets through tumblers and mixers to make them essentially untraceable.
The company’s website is down and attempts to reach the two brothers have not yielded any results. The disappearance of about 69,000 coins, worth more than $4 billion when Bitcoin was trading an all-time high of $65,000, would represent the biggest-ever dollar loss in a cryptocurrency scam. The incident could accelerate regulators’ efforts to impose order in the market amid rising cases of fraud.
The South African Finance Sector Conduct Authority is also looking into Africrypt but is currently prohibited from launching a formal investigation because crypto assets are not legally considered financial products, according to the regulator’s head of enforcement, Brandon Topham. The police have not yet responded to a request for comment.
