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By Tim Cocks
JOHANNESBURG: Lawyers for investors in a South African cryptocurrency exchange, who told their clients in April that their accounts were hacked, said $ 3.6 billion had disappeared from the platform and that two brothers who ran it could not be found.
If confirmed, Africrypt’s losses would rank among the biggest crypto losses to date. For 2020 as a whole, losses in the crypto industry due to fraud and other crimes were $ 1.9 billion, up from a record $ 4.5 billion in 2019, according to crypto intelligence firm CipherTrace.
Africrypt COO Ameer Cajee said in a letter to clients, dated April 13, that accounts receivable had all been compromised due to a recent breach in his system. The letter, reviewed by Reuters, said Africrypt had halted operations and “initiated the process of attempting to recover the stolen funds.”
He gave no details of the missing amount of money and warned clients that trying to get their money back by bringing in lawyers “will only delay the recovery process.”
Hanekom Attorneys, a law firm hired by some of those who say they lost money, told Reuters in a statement that their investigations so far have found that a total of $ 3.6 billion had disappeared from Africrypt. The company did not immediately respond to a request for comment on how it reached that figure.
Reuters could not reach Africrypt for comment. Calls to Cajee’s cell phone went to voicemail and he did not respond to text messages. The trade website is offline.
Darren Hanekom, an attorney representing the investors, said Cajee and his brother and co-founder Raess had been missing since the April 13 letter and referred the matter to South Africa’s anti-corruption police, nicknamed the Hawks, in April. 16.
Bitcoin hit a record high of nearly $ 65,000 on April 14.
Hawks spokesperson Philani Nkwalase said they have so far been unable to open the case because Hanekom Attorneys is based in the Western Cape and those looking to get their money back are in d ‘other provinces.
“We advised these people to please open the files where they are,” he said by phone. “Go to the nearest police station. ”
Cajee’s cousin Zakira Laher, who said she was director of Africrypt until her resignation in 2019, told Reuters the brothers had been missing since April.
“I say this on behalf of the whole family that we have no idea where they are,” she said by phone. “Around mid-April, they just stopped talking to us. They’re not responding to us on WhatsApp.”
Hanekom said he alerted several other crypto exchanges to the matter and his company informed South Africa’s Financial Sector Conduct Authority (FSCA) this month, but could not get involved. because it does not regulate cryptocurrencies.
FSCA chief enforcement officer Gerhard van Deventer told Reuters in response to questions about Africrypt cryptocurrency is not defined as a financial product and the FSCA lacks jurisdiction to investigate .
“We are in the process of bringing crypto into the regulatory fold,” he said.
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