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$3.6 billion in Bitcoin disappear from South African firm, its owners missing too

$3.6 billion in Bitcoin disappear from South African firm, its owners missing too

$3.6 billion in Bitcoin disappear from South African firm, its owners missing too
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By CNBCTV18.com Jul 1, 2021 3:37 PM IST (Updated)

This could be the biggest cryptocurrency scam as the losses are about thrice the value of another big crypto scam in South Africa last year.

A South African cryptocurrency investment firm is being investigated after its owners reportedly duped investors of about 69,000 Bitcoin, approximately worth $3.6 billion or Rs 26,700 crore.

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This could be the biggest cryptocurrency scam as the losses are about thrice the value of another big crypto scam in South Africa last year.


South Africa's Finance Sector Conduct Authority (FSCA) is mulling investigation into the scam, but they are faced with a legal hurdle as crypto isn’t officially recognised in the country.

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After Ameer Cajee and his brother Raees, who founded AfriCrypt two years ago, could not be located, a Cape Town-based law firm, Hanekom Attorneys, hired by investors reported the incident to Hawks, South Africa's Directorate for Priority Crime Investigation (DPCI).
In April, Ameer Cajee, CEO of AfriCrypt, had told his clients that the company had been hacked, but asked them not to report the matter to authorities as doing so would decelerate the process of recovery.
AfriCrypt employees lost access to the back-end platforms a week before the alleged hack. The Cajee brothers went incommunicado and calls to their cellphones are being directed to their voicemails. The website of the company has also become inaccessible.
Some investors have hired lawyers to investigate the matter while another has set started liquidation proceedings against AfriCrypt.
Initial investigation by Hanekom Attorneys found that investors' pooled funds were shifted from AfriCrypt's South African accounts and client wallets. The law firm also found that those particular Bitcoin had become undetectable after being shifted to other bigger pools (a process referred to as ‘tumblers and mixers’).
South Africa’s regulator FSCA is examining the AfriCrypt matter. Crypto exchanges across the world have been asked to block any attempt to convert these digital coins.
The country's banking regulator Prudential Authority has accelerated the timeline for finalising a regulatory framework for cryptocurrency within 3-6 months.
In 2020, South Africa had witnessed another big crypto scam when Bitcoin trader Mirror Trading International collapsed leading to a loss of $1.2 billion involving about 23,000 digital coins. This was the biggest crypto scam of 2020, as per Chainalysis (blockchain data platform) report.
Several countries are taking measures to stop the unregulated cryptocurrency businesses. The UK's finance regulator banned Binance Markets Ltd on June 27. China directed Huobi to stop its members from trading derivatives.
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