$3.6 billion allegedly stolen from Africrypt exchange

Lawyers for investors in a cryptocurrency exchange in South Africa say billions have disappeared after accounts were hacked – and two brothers who ran the exchange can’t be found

(AF) A huge crypto scam appears to have occurred in South Africa, with lawyers representing some of the investors alleging that $3.6 billion has disappeared – and that two brothers who ran the Africrypt exchange have vanished.

This could rank as one of the biggest crypto frauds ever, if confirmed. The money appears to have been transferred or swapped in other cryptocurrencies on the dark web, one lawyer has said.

In a letter seen by Reuters dated April 13, Africrypt’s COO, Ameer Cajee, told clients their accounts had all been compromised due to a breach.

The letter did not confirm how much money was missing, but it warned clients that trying to get their money back using lawyers would, quote, “only delay the recovery process.”

Cajee and his brother and co-founder Raess have not been heard from since.

Darren Hanekom, a lawyer representing some of the investors, told Reuters: “The coins were no doubt transferred or swapped into another cryptocurrency and with the view of getting it off the Bitcoin network.

“We suspect that these coins are currently still in or currently still subject to dark web mixes, dark web interfaces, and platforms to obfuscate the identity of the wallet holders, and to obfuscate the flow of these cryptocurrency transactions.”

Hanekom said he had alerted other crypto exchanges of the case and that his firm had informed South Africa’s Financial Sector Conduct Authority. But he said the FSCA agency could not get involved as it does not regulate cryptocurrencies.

The case appears likely to bolster calls for greater regulation of crypto trading – an issue that regulators in the US and other countries have been studying for some months.

With reporting by Reuters