South African brothers accused of vanishing with billions of dollars in cryptos deny allegation

Raees Cajee, who is the co-founder and CEO of South African cryptocurrency investment platform, AfriCrypt, has denied claims that he and his brother, Ameer Cajee, who is the COO of the company, took off with billions in investor funds, asserting the platform only lost $5 million in a hack.

Backstory

Last week, Nairametrics reported that AfriCrypt, a cryptocurrency investment company that offers daily returns of up to 10%, vanished with 69,000 BTC of investors funds. Considering the current price of Bitcoin as of the time of writing this report, this puts the dollar value of the allegedly stolen Bitcoin at $2.4 billion.

As earlier reported, AfriCrypt had notified its investors of the hack on April 13 and suspicions were immediately raised when a message from the COO urging investors to avoid taking legal action as it would slow down the recovery of the funds. After this, the brothers halted AfriCrypt’s operations and went missing as attempts to reach the brothers all came back without a positive result.

What they are saying

The CEO, Raees Cajee, speaking with The Wall Street Journal (WSJ), countered the accusations laid against AfriCrypt, stating that he and his brother went into hiding after receiving death threats from some “very, very dangerous people.” He also rejected claims that $3.6 billion in funds is missing, stating that the firm only managed $200 million during its peak in April and that only $5 million in investor funds are unaccounted for after the hack. He stated, “At the height of the market, we were managing just over $200 million.”

Hanekom Attorneys, one of the law firms representing AfriCrypt’s customers stated that the brothers transferred $3.6 billion worth of BTC from AfriCrypt’s accounts and client wallets through “various dark web tumblers and mixers” to make the funds untraceable.

Lawyer John Oosthuizen, who is representing the Cajee brothers, told the BBC that the pair has denied the allegations they stole their investors’ funds. He stated, “They maintain that it was a hack and they were fleeced of these assets”.

What this means

As previously reported, if the allegations against AfriCrypt are true, the incident would surpass the losses from South African-based Ponzi scheme, Mirror Trading International, which scammed 23,000 BTC from unsuspecting investors. This case has represented the country’s largest confirmed cryptocurrency fraud to date, which represents $812 million with Bitcoin trading at a current market price of $35,300, as of the time of writing this report.

South Africa’s Financial Sector Conduct Authority (FSCA) released a statement regarding the case stating that the project appeared to have Ponzi-like characteristics. They said, “This entity was offering exceptionally high and unrealistic returns akin to those offered by unlawful investment schemes commonly known as Ponzi’s.”

However, the FSCA made it clear that it cannot take any action against AfriCrypt as crypto assets are currently unregulated in South Africa.

According to WSJ, the brothers plan to surface for a July 19 court hearing regarding their claims.

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