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Two South African brothers vanish with 69 000 Bitcoin

Bitcoin, Bitcoin's, trading Zimbabwe

It seems two South African brothers might have pulled one of the biggest Bitcoin scams of all time. Initial investigations seem to suggest that the owners of an investment platform called Africrypt, might have defrauded their clients of 69 000 coins that were pilfered from wallets in a matter of hours. The coins are worth about US$2.2 billion at current Bitcoin prices but were worth US$3.8 billion when the heist happened. The brothers have since fled to the United Kingdom according to various news reports.

What happened?

Africrypt which was owned by brothers Raees and Ameer Cajee marketed itself as an investment platform. They promised investors with returns of between 2-11% depending on which type of portfolio they choose. Your options were between passive, passive-aggressive and aggressive portfolio. You also earned rewards for referring investors which is something Multi-level marketing schemes (what legal pyramid schemes are called) typically do. It doesn’t appear like Africrypt matches the description of a Multi-Level Marketing scheme, however.

Unlike other scams where the user is required to buy their own Bitcoin and transfer it to the “investors” wallet, Africrypt appeared to be a valid business. They had a verified headquarters in Melrose Johannesburg, they had an FNB bank account. Investors were asked to deposit funds into this account. The funds they deposited would then be used to purchase Bitcoin from local exchanges including Luno.

For months things worked as expected and clients would get their returns and money. It’s not clear what exactly Africrypt was investing in for them to promise these wild returns. It might just be that they were fortunate because Bitcoin was going through a sustained bullish period and so they were getting some pretty good returns without doing anything really.

Then around mid-April this year things went awry. According to the owners of Africrypt, their platform was hacked and funds within these wallets were transferred pilfered, moved into various wallets, combined, split again and moved in general evasive manoeuvres typical of money laundering and criminals. Suspiciously the funds went through a wallet that was typically used for normal transactions. When this happened the CEO, one of the brothers send an email with the following passage to investors:

Dear Client,

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.

Not long after that, the company’s website went offline and there has been no further communication from Africrypt. The matter has taken this long to come to light because most investors heeded the warning from the brothers not to involve authorities or to go public. News of the heist has only come to light because some clients have lost patience and engaged a law firm to try and recover their dues.

The matter has since been reported to the Hawks the elite crime-fighting unit from South Africa. The brothers are in the wind and speculation is rife that they are hiding somewhere in the UK but no one knows where they really are. They could be sitting on some exotic beach somewhere sipping Mai Tai’s. US$2 billion is quite the haul.

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One thought on “Two South African brothers vanish with 69 000 Bitcoin

  1. Now “investors” need the help of government to pursue the brothers, but at the same time individuals engaged in crypto trading against their reserve banks advice and policy. 😂

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