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Ameer and Raees Cajee have disappeared with $3.6 billion in bitcoin in what is being deemed the biggest bitcoin heist in South African history. The brothers, who founded the South African cryptocurrency investment platform, AfriCrypt, allegedly stole 69,000 bitcoins after reporting that their systems were hacked in April.
The heist is currently being investigated by Hanekom Attorneys, a law firm that specializes in cryptocurrency suits. The firm has since reported the incident to the Hawks, an elite police force in South Africa. South Africa’s Finance Sector Conduct Authority is also aware of the situation, however, it cannot launch an official investigation because bitcoin is not legally considered a financial product.
The Great Bitcoin Robbery
Ameer and Raees Cajee (20 and 17 respectively) are gone and so is the massive stockpile of bitcoin, which was attached to AfriCrypt, a South African-based crypto investment firm that promised massive returned to its investors. The service was founded in 2019 and saw steady growth alongside the world’s most valuable cryptocurrency until April when the price of bitcoin surged above $60,000.
At that time, the young entrepreneurs told their investors that AfriCrypt had been hacked. The email, sent by Ameer Cajee, the company’s Chief Operating Officer, pleaded with investors not to report the incident to authorities or lawyers, claiming that an investigation would slow down the efforts to recover from the hack. It isn’t clear whether the nature of the hack or the company’s losses were detailed in the email.
It was later revealed that seven days before the email was sent to investors, AfriCrypt employees were locked out of the system’s back-end. Some investors, who had a bad feeling about the situation and were skeptical about Ameer’s request, contacted Hanekom Attorneys. The law firm “focuses on all aspects of the cryptocurrency industry,” and counsels “large-volume traders, exchanges, and arbitrage companies.”
In a statement, Hanekom Attorneys said that “we were immediately suspicious as the announcement implored investors not to take legal action. Africrypt employees lost access to the back-end platforms seven days before the alleged hack.” People eventually learned that AfriCrypt combined its funds, pooled from its South African accounts and client wallets, with other bitcoin transactions in an attempt to make them untraceable. The stolen funds, totaling $3.6 billion, have not been located, and Ameer and Raees Cajee have disappeared to the U.K.
After freezing accounts and stealing the money, the brothers have disabled AfriCrypt’s website and have avoided investors who want to know what happened. According to Hanekom Attorneys, though the funds are untraceable, global exchanges have been alerted about the alleged theft and will keep an eye out for large cryptocurrency liquidation or an attempt to convert the bitcoins to other crypto denominations.
Liquidation Proceedings Against AfriCrypt And Ameer and Raees Cajee
A second group of investors affected by the bitcoin heist have started liquidation proceedings against AfriCrypt, which would force the 69,000 bitcoins to be sold and the money to be distributed accordingly. A South African judge ruled in favor of the group of about 20 investors, which granted a provisional liquidation order against Ameer and Raees Cajee back in April. The order asserts that the brothers have until July 19 to argue against the liquidation.
History Of Heists
This isn’t South Africa’s first bitcoin heist. The incident follows shortly after South African Mirror Trading International (MTI) collapsed in 2020, which defrauded investors over $589 million, though one report by Yahoo! Finance claimed that the scam was closer to $1.2 billion.
So far, the cryptocurrency market has done well to prevent scams of this size, though incidents like these are hard to avoid given the lack of governmental support for the digital currency. Exchanges have put security measures in place to prevent hackers from liquidating stolen funds, though there are still plenty of leaks that fall through the cracks.
In a 2021 Crypto Crime Report, Chainalysis found that there was over $10 billion in illicit transaction volume, despite efforts to curb scams and hackers. The best way to combat further losses is for governments to put regulations in place on the market, though solutions are still limited.