If you’re a cryptocurrency investor in South Africa and you trusted an exchange called Africrypt, you probably haven’t had a great time lately.

Africrypt was one of South Africa’s largest cryptocurrency exchanges, a digital platform that allowed its investors to exchange cryptocurrencies like Bitcoin for other forms of cryptocurrencies or conventional fiat money like the Rand or Dollar.

Launched in 2019 by Ameer (20) and Raees (17) Cajee, the exchange promised investors a good return on their money but it seems like it meant a ‘good return’ for the exchange, not so much for the investors.

The first red flag appeared earlier this year in April when the exchange sent its investors an email stating that they were the victim of a ‘hack’ that had compromised investor accounts, wallets and nodes so they would be shutting down and freezing all accounts.

They also reportedly asked investors not to report it to the authorities because it would ‘slow down the recovery process.’ We’ve heard some good fibs in the past but this almost seems too good.

Africrypt? More like Afriscam

Not long after, investors took it upon themselves to hire Cape Town-based law firm Hanekom Attorneys to investigate.

The firm’s investigation found that Africrypt had transferred its clients’ collective 69,000 bitcoin (around R51 billion) through tumblers and mixers — a way to launder bitcoin and make the transactions essentially untraceable. Calls to either brother currently go unanswered and the company’s website is down, so things are looking grim.

It’s possible there’s a reasonable explanation for what’s happened at Aficrypt but since the Cajee brothers are reported to have fled to the UK, it seems unlikely that this is anything more than blatant theft.

What makes matters even worse is that in South Africa the digital currency is not considered a legal financial product. This makes the Finance Sector Conduct Authority’s job to properly investigate this difficult, if not outright impossible.

Source: Bloomberg via Coindesk