The founders of local cryptocurrency exchange, Africrypt, have done a runner, reportedly fleeing the country with $3.6 billion (~R54 billion) in tow.
Bloomberg (paywall) reported on the news earlier this week, as a Cape Town-based law firm confirmed that it cannot locate the founders, brothers Ameer and Raees Cajee. The pair ran one of the latest exchanges in the country and allegedly stole more than 69 000 Bitcoin, representing an estimated value of almost $4 billion, when the crypto was at its peak in April.
This would also represent the world’s largest cryptocurrency scam to date.
The aforementioned law firm has since informed The Hawks about the situation, who will be utilising their resources in order to further investigate the matter and hopefully locate the pair in order to retrieve the stolen investor Bitcoin. Crypto exchanges across the globe have also been put on alert as to the pair’s vanishing act, in a bid to stop them from laundering the stolen investments.
As Bloomberg notes, the scam happened in April as Bitcoin was in its high. Ameer Cajees, who is also the chief operation officer at Africrypt, notified investors that the platform had suffered a hack, but that they should not notify authorities as this would slow down the process of recovering the funds.
“We were immediately suspicious as the announcement implored investors not to take legal action,” the law firm in question, Hanekom Attorneys told Bloomberg in a response. “Africrypt employees lost access to the back-end platforms seven days before the alleged hack,” the firm added.
It remains to be seen what will happen with this incident, particular in terms of recovering the stolen funds. As Engadget points out, SA’s Financial Sector Conduct Authority (FSCA) has no ability to launch a formal investigation into the matter as cryptocurrency isn’t legally considered a financial product in South Africa.
While this is still a developing event, it looks like cryptocurrencies, their regulation and legal recognition will become hotly debated issues moving forward.