One of the biggest investment scandals in Bitcoin history is unfolding right now in South Africa. The company there, AfriCrypt, has been accused of misappropriating 69,000 Bitcoins, which currently represents about $2.4 billion.
What is AfriCrypt and who is behind it
AfriCrypt is a South African company that was founded in 2019 by brothers Ameer and Raees Cajee. Although they are very young and are 20 and 17 years old respectively, they are estimated to have held around 69,000 Bitcoin on their exchange.
In mid-April, AfriCrypt informed its customers about the troubles it was having on its platform. The email sent also included information about freezing all the accounts they had. The alleged reason was a hacking. The clients quickly became suspicious as the same e-mail contained a tip not to inform any services. The reason was that it would be difficult for them to fight the threat. Shortly afterwards the AfriCrypt platform was shut down and the brothers vanished into thin air. Circumstantial evidence pointed to their potential departure to the United Kingdom. Representatives of a law firm representing some of the victims noted that the bitcoins collected by the Cajee brothers were supposed to have been run through so-called cryptocurrency mixers, making them unlikely to be detected.
Raees Cajee refutes the allegations
On June 28, The Wall Street Journal published an interview conducted with Raees Cajee. He denied all accusations against AfriCrypt. He defended the company’s interests saying that the loss of funds accumulated by investors is the result of a hacking attack. He also stated that it is true that the brothers are in hiding. However, this is the result of threats they received from unspecified persons.
Importantly, services in South Africa cannot take any formal action on AfriCrypt because the cryptocurrency market there is unregulated. According to the country’s laws, digital assets are not a financial product. This results in perhaps one of the biggest cases in the history of crypto investing going unresolved, and funds of $2.4 billion may never be recovered.
Similar situations have already occurred
This case is not isolated, however. In the South African market alone, the case of the broker Mirror Trading International and its $589 million fraud is well-known. This was approximately 23,000 BTC at the time. If, on the other hand, the allegations against the Cajee brothers turn out to be untrue and the funds that were lost were indeed the result of a hacking attack, it may resemble the Mt. Gox case. The Japanese exchange that collapsed in 2014 lost 850,000 BTC belonging to over 24,000 customers. Its case is still ongoing, and some of the stolen bitcoins are expected to be returned to their former holders soon.