The two South African brothers behind the crypto investment platform "Africrypt" have disappeared along with 3.6 billion USD in bitcoin bought with investors' funds. Regulators in South Africa are now looking to take action following what might be one of the world's biggest crypto frauds.
Two South African brothers, Ameer and Raees Cajee, have reportedly disappeared, taking 3.6 billion USD worth of bitcoin (BTC) with them. The incident would make it one of the world's biggest incidents related to cryptocurrencies. The total amount that’s been recorded as stolen is 69'000 BTC.
Alleged "hack" of the platform
The two brothers were the creators of a platform called Africrypt, which first showed signs of trouble earlier this year. Investors hired a law firm to look into the case after Ameer Cajee said that the company was a victim of a hack in April. At the time, the company held over $4 billion worth of bitcoin.
He also asked investors not to report the incident to authorities, which further raised signs of trouble. His purported explanation was that it would slow down the process of recovering the funds. However, soon after, investors hired the Hanekom Attorneys law firm to investigate the incident. Employees at the firm lost access to back-end platforms seven days before the founder revealed the alleged hack, according to the report. The country’s national police force has been assigned to the case, which has contacted crypto exchanges to ensure that the funds aren’t liquidated.
However, the bitcoin has been sent through mechanisms that prevent tracing - tumblers and mixers and large pools of bitcoin, which is making it hard to track the funds. The company website has also been shut down. The Cajee brothers launched Africrypt in 2019, promising investors good returns for their money. This is not the first such incident to take place in South Africa, with another company involved in a $1.2 billion scam in 2020. One governmental group in South Africa has called for regulation of exchanges.
Crypto market regulations
The cryptocurrency market, while it has done much to curb scams, is still subject to some nefarious incidents. Exchanges are working together to ensure that hackers and fraudsters cannot liquidate their funds, but it does not form airtight security.
Chainalysis, in its 2021 Crypto Crime Report, noted that illicit activity as measured by the amount of funds involved had reduced significantly since 2019, but remained an issue. It totaled over 10 billion USD in transaction volume. These numbers are what is spurring governments to put regulation in place and place better oversight measures on the market. But being such a nascent asset class, it is difficult for them to come up with a one-size-fits-all solution. Furthermore, the decentralized nature of the market proves to be a tough nut to crack.
Still, governments are putting in resources to form an effective framework. Global bodies like the Financial Action Task Force (FATF) and the Bank for International Settlements (BIS) have offered their thoughts on the matter as well.
