A South African cryptocurrency investment company, AfriCrypt, which was launched in 2019 by 17-year-old Ameer Cajee, and his 20-year-old brother, Raees Cajee has allegedly defrauded around $3.6 billion in investor funds that amounts to R54bn. According to IOL, it was said that their trading system was “hacked”.
In total, 69 000 bitcoins went missing.
The investors were told not to report the hack to law enforcement as the brothers allegedly claimed that it would delay the process of recovering the funds. The duo then reportedly transferred the funds from a South African account before leaving to the UK, IOL adds.
It has been alleged that investors were told to deposit funds via EFT into AfriCrypt’s FNB banking account. However, FNB risk spokesperson, Nadiah Maharaj said: “FNB once again confirms that it does not have a banking relationship with Africrypt. Due to client confidentiality, FNB cannot provide any information on specific bank accounts.”
The Financial Sector Conduct Authority (FSCA) has spoken up regarding the number of theft-related scams that continues to grow in South Africa: “The authority is concerned over the large number of scams being perpetrated by people purporting to provide the crypto asset to the public,” it said. “The public must be aware of the very large number of unscrupulous players in this sector.”
Meanwhile, Zakira Laher who is the cousin of the duo and the former director at Africrypt has said that people are now asking her for money, and she doesn’t know what to tell them, Business Insider reports.
“And I’m terrified for my life, I don’t have R50 billion to run to the UK or Dubai or China or wherever they are in the world,” she said.
This comes after AfriCrypt investors lost access to the back-end of the system when the “hack” was announced.
“We regret to inform you that due to the recent breach in our system, client accounts, client wallets and nodes were all compromised,” it said.
“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.”
The attorney who is handling the case on behalf of the investors, Darren Hanekom, said that these funds were “subjected to various dark web tumblers and mixers, resulting in severe fragmentation.“ This means that the funds seems to be untraceable. They have, however, alerted various global exchanges about the alleged theft in a bid to watch out for efforts to convert the bitcoins, as IOL reports.
The Gauteng South High Court has granted a provisional liquidation order against the two brothers, in favour of about 20 investors.
The brothers have until July 19 to argue against the liquidation.