AFRICRYPT CRYPTO SCAM

The two founding brothers of the crypto platform and cryptocurrency exchange Africrypt are currently suspected of disappearing with billions worth of Bitcoins.

According to several reports, the founders of South African cryptocurrency investment platform Africrypt have disappeared along with $3.6 billion worth of Bitcoins. Meanwhile, the Wall Street Journal, citing an estimate from the eldest brother, reports Bitcoins worth US$200 million that the company is said to have managed. While the exact value of the BTC assets is still unclear, it seems increasingly clear that the two brothers have indeed absconded with the coins.

What is known so far is that the law firm Hanekom Attorneys in Cape Town has not been able to locate the brothers Ameer and Raees Cajee. Bloomberg reported this most recently, adding that not only were the calls to the Cajee brothers unanswered but also the company’s website was down or unavailable. Meanwhile, the lawyers had already informed the authorities and notified exchanges worldwide, asking them to report if anyone tried to exchange the coins.

But according to Bloomberg, there was some strange activity in the run-up to the brothers’ disappearance. For example, Africrypt founding member Ameer Cajee informed investors that the crypto platform had been the victim of a hacking attack in April. Cajee is also said to have advised investors not to report the incident to the authorities as this would slow down the recovery of funds, shortly after which the Africrypt site was no longer accessible.

Several sceptical investors then called the law firm Hanekom Attorneys, while some less patient investors were already initiating liquidation proceedings against Africrypt. The lawyers then launched their own investigation, telling Bloomberg that they had already discovered at that point that company employees had lost access to back-end platforms seven days before the alleged hack.

It will be difficult for the regulators and authorities to investigate the disappearance of the two brothers, as they are prohibited from launching a formal investigation in addition. The reason for this is the legal regulations because, under South African law, cryptocurrency assets are not yet considered financial products. In a public statement, the South African Financial Sector Conduct Authority (FSCA), under whose jurisdiction financial fraud falls, said that complaints had been received against Africrypt. They were currently investigating whether the company had actually offered a financial product or service. This point is elementary for the progress of the investigation because if this was the case, Africrypt would have had to register with the regulatory authority – which, however, did not happen. “At this point of time, we have only found evidence of cryptoasset transactions. Currently, cryptocurrency assets are not regulated by any financial sector legislation in South Africa, and consequently, the FSCA is not authorised and in a position to take regulatory action,” the authority added.

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