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South African Brothers Vanish With $3.6 Billion In Bitcoin

FinTech

South African Brothers Vanish With $3.6 Billion In Bitcoin

AfriCrypt, a South African cryptocurrency investment company, has reportedly defrauded around $3.6-billion in investor funds after the company made claims that its trading systems had been hacked.

Investors in AfriCrypt reportedly count amongst South African celebrities and other high-profile individuals. In a matter of hours the staggering monetary amount, around R54-billion, seemingly disappeared without a trace on 13 April.

The first signs of trouble came in April, as Bitcoin was rocketing to a record. Africrypt Chief Operating Officer Ameer Cajee, the elder brother, informed clients that the company was the victim of a hack. He asked them not to report the incident to lawyers and authorities, as it would slow down the recovery process of the missing funds.

“We regret to inform you that due to the recent breach in our system, client accounts, client wallets and nodes were all compromised,” a statement from the Cajee brothers read.

“Unfortunately, this has forced Africrypt to halt operations … We urge all clients to please be patient as we attempt to resolve the situation. It is understandable that clients may proceed the legal route, but we ask clients to please acknowledge that this will only delay the recovery process.”

Some skeptical investors roped in the law firm, Hanekom Attorneys, and a separate group started liquidation proceedings against Africrypt.

“We were immediately suspicious as the announcement implored investors not to take legal action,” Hanekom Attorneys said in response to emailed questions. “Africrypt employees lost access to the back-end platforms seven days before the alleged hack.”

The firm’s investigation found Africrypt’s pooled funds were transferred from its South African accounts and client wallets, and the coins went through tumblers and mixers — or to other large pools of bitcoin — to make them essentially untraceable.

The Gauteng South High Court, South Africa, has since granted a provisional liquidation order against the two brothers in favor of about 20 investors who lost considerable amounts due to the alleged scam.

The brothers have until 19 July 2021 to argue against the liquidation. However, the funds themselves are still nowhere to be found.

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