United Kingdom

Founders of South African Bitcoin exchange Africrypt 'disappear with $3.6billion in currency'

The founders of a South African cryptocurrency exchange have reportedly disappeared with nearly $3.6billion in Bitcoin after telling investors they were hacked in April.

Bloomberg reported that a Cape Town law firm says it cannot locate Ameer and Raees Cajee, the founders of Africrypt - one of the country's largest cryptocurrency exchanges.

In April, the company told investors it had been hacked but asked that they not report the incident to police, saying that would slow the process of recovering their missing funds. The alleged hack came as Bitcoin's value surged to record highs. 

Some investors retained law firm Hanekom Attorneys to investigate the incident, but the law firm could not find the brothers.

What it did discover was that Africrypt's pooled funds had been withdrawn from the local accounts and client wallets where the coins were originally kept, then put through tumblers and mixers - a.k.a. other large pools of Bitcoin - a process that severely complicates any attempt at tracing the money.

'Africrypt employees lost access to the back-end platforms seven days before the alleged hack,' Hanekom Attorneys told Bloomberg.

The founders of a South African cryptocurrency exchange have reportedly disappeared with nearly $3.6billion in Bitcoin after telling investors they were hacked in April. Bloomberg reported that a Cape Town law firm says it cannot locate Ameer and Raees Cajee, the founders of Africrypt - one of the country's largest cryptocurrency exchanges [Stock image]

The outlet reported it had tried to call both brothers multiple times but all calls went straight to voicemail. The Africrypt website is also down.

The incident has been reported to Hawks, an elite national police force that tackles organised crime, economic crime, corruption, and other serious crime. 

Lawyers have also alerted crypto exchanges worldwide to be on the lookout for attempts to convert the coins.  

South Africa's Finance Sector Conduct Authority is looking into Africrypt but cannot launch an official probe into the incident because cryptocurrency is not considered a legal financial product in the country, Bloomberg reported citing the watchdog's head of enforcement Brandon Topham.

The market is believed to be operating largely unchecked by regulatory powers, Bloomberg reported.

If the money is not recovered, the incident would be the largest-ever cryptocurrency loss in history. 

Last year, Mirror Trading International, another South African Bitcoin trader, collapsed, with investors losing about $1.2billion in digital currency.              

If the money is not recovered, the incident would be the largest-ever cryptocurrency loss in history [Stock image]

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