Key Takeaways

  • The founders of Africrypt have disappeared with $3.6 billion worth of Bitcoin.
  • Africrypt, founded in 2019, was one of the most popular exchanges in South Africa.
  • While police is searching for the brothers, a formal investigation can’t be started as South Africa doesn’t recognize cryptocurrencies as a financial product.

Share this article

In one of the biggest crypto heists ever, the founders of the Africrypt exchange in South Africa have vanished with 69,000 BTC worth $3.6 billion, one of the largest BTC thefts in crypto history.

Founders Asked Investors Not to Report Hack

A South-African law firm hired by investors still hasn’t managed to locate the founders, two brothers called Ameer and Raees Cajee. Other exchanges have been notified in case the Cajee brothers try to convert their coins.

The saga started two months ago when the brothers informed their investors the company was the victim of a hack.

In April, CEO Ameer Cajee asked all investors not to report the hack to law enforcement or lawyers as it would slow down the recovery of the stolen funds. When several investors went to Cape Town’s Hanekom Attorneys to start liquidation proceedings against Africrypt, the firm realized that 69,000 BTC had been transferred from the exchange’s digital wallet to on-chain addresses.

The two brothers were in the process of laundering the BTC through different on-chain mixing mechanisms in the hope of making their proceeds untraceable. At the moment, Hanekom Attorney is working with the national police to locate Ameer and Raees Cajee.

Crypto Crime in South Africa

South Africa has long been a leader both in cryptocurrency adoption and scams. Chainalysis’ 2020 Crypto Crime Report named Mirror Trading International, another South-African exchange, the biggest cryptocurrency scam of 2020 after the exchange took more than $500 million worth of funds from its 470,000 clients.

In 2020, crypto criminals are expected to have acquired nearly $2 billion.

It is likely that South African users who lost funds in the MTI scam moved to Africrypt, which quickly became one of the country’s most popular exchanges. If the numbers are correct, the Africrypt scam dwarfs even MTI in another disaster for the country’s crypto economy.

Further complicating the situation, the country’s legislation doesn’t recognize cryptocurrency as a financial product. This prevents South Africa’s Finance Sector Conduct Authority to launch a formal investigation and deploy all means necessary to recover the stolen funds.

Disclaimer: The author held ETH at the time of writing.

Share this article