SA Brothers Vanish With R54 BILLION Bitcoin
Two South African brothers who were running a “cryptocurrency investment platform” have vanished together with 69,000 bitcoin from the Africrypt platform. The bitcoins are worth a massive R54 billion ( approximately US$3.6 billion).
The two brothers, 21-year old Raees Cajee and 18-year-old Ameer Cajee are suspected to have fled to the United Kingdom with the funds.
Raees was the founder and CEO of Africrypt while Ameer was the Chief Operating Officer of the platform which was founded in 2019.
According to local media, Africrypt offered investors mouth-watering lucrative returns on their investments. Moneyweb reports that some investors were even offered an outrageous 10 percent return on investment per day.
Some clients are known to have invested R1.5-million, with a few as much as R15-million and R20-million.
To hide the fact that they were running an elaborate scam, the Cajee brothers told potential investors that they were mining cryptocurrencies. They claimed to have mined over 100 000 Ethereum coins using home-based computer systems.
The claim has been dismissed by experts who cite South Africa’s high electricity costs, and unstable power generating capabilities. By way of comparison, Toronto Stock Exchange-listed Hive Blockchain Technologies, a professional crypto mining firm, mined just 71 660 Ethereum coins in 2020.
The Cajee brothers’ suspected scam started unravelling in April when they claimed that the investment platform had been hacked. The Cajee brothers warned investors not to disclose the alleged hack to law enforcement officials. Ameer Cajee sent the following letter to clients,
We regret to inform you that due to the recent breach in our system, client accounts, client wallets and nodes were all compromised. At this point, it is unknown to us the extent of personal client information breached during the attack.
Unfortunately, this has forced Africrypt to halt operations. We have begun the process of attempting to retrieve stolen funds and compromised information. Our number one priority is retrieving the funds as speedily as possible, however, this process is very wary and will take a substantial amount of time to complete, if successful. Furthermore, we have begun a full system audit to determine the extent of the breach.
We urge all clients to please be patient as we attempt to resolve the situation at hand. 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.
Clients will be kept updated on progress made in the recovery process and with any information regarding the parties involved in orchestrating the attack on our systems.
Africrypt’s website has since gone offline and all further communications have ceased.
However, some sceptical investors hired a legal firm, Hanekom Attorneys to look into the matter. Commenting on the alleged hack, Daren Hanekom of Hanekom Attorneys told Bloomberg Wealth,
“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.”
A report from the attorneys goes on to say,
“R54-billion has been transferred from its South African account(s) through bitcoin on the blockchain, and has regrettably, now been dissipated in its entirety. While we are still in the process of investigating the transfer of funds, with transactions on the blockchain being active up and until even date, upon an initial reconciliation, it seems that the funds were subjected to various dark Web tumblers and mixers, resulting in severe fragmentation.”
The matter has since been reported to the Hawks, an elite unit of the South African national police force.
The Africrypt scam comes just a year after another South African Bitcoin trader, Mirror Trading International (MTI) collapsed with clients losing about 23,000 digital coins, worth about R18 billion (US$1.2 billion).
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