Founders of South African Bitcoin exchange disappear after $3.6 billion 'hack'

[jaysabi]

Was it really an exchange?
Sounds more like an investing scam:

https://coingeek.com/south-africa-btc-scam-africrypt-makes-off-with-3-8b-asks-victims-not-to-report/

Africrypt targeted high-net worth individuals and celebrities, according to reports. As with any other scam, it promised ludicrous returns, at times claiming it could offer 10% daily returns. The company was so adept at targeting its victims that most of its investors treated it like their own secret path to a world of unlimited wealth. It was this target market that Africrypt used to reach out to other wealthy investors in their inner circles. Many clients invested upwards of R1.5 million ($105,000), with some going as high as R20 million ($1.4 million).

Here is an archived page:
https://archive.vn/8AoqX

Sounds more like the usual ponzi scheme, probably those 3.6 billions (calculated at max peak price) are more likely sums people though they have in their accounts than actual money invested.

Anyhow, sorry to say it, but the ones investing millions with a company run by a 20 and a 17 year old were looking for a way to lose money.

Good find.  I highly doubt anyone did any research into who owned the company, just as I'm sure no one actually does any research before investing with Coinbase or Kraken or any other exchange.  But this touting of ridiculous returns has red flags written all over it.  I don't feel bad for anyone who lost money here, this had scam written all over it.

[NeuroticFish]

(Ponzi Scheme) ==> Africrypt boasted returns of 2-11% a month 

This clears it up big time.
How on earth did so many people fall for a Ponzi ran by kids? (Yeah, rhetorical...)

I'd say it's just normal that they're gone off radar with so much money at hand. And the "investors" just simply deserve their fate, like anybody "investing" in Ponzis.

[el kaka22]

A 17-year old was allowed to run a multi-billion business? Is this even legal in South Africa? Here in India it is not legally possible. You need to be at least 18 years old to own a private business. And I am even more surprised with the carelessness from the users. They were keeping billions of USD worth of coins in an exchange which is run by a 17-year old? BTW why these two are missing? That makes me suspicious. What if this is an inside job? BTW, the promoters look much older in this photo. Difficult to believe that one of them is 17 years old.

I can easily say that there are way too many people in the world who do not check who is the owner. I mean yeah surely we all know CZ and Binance, but who is the owner of Coinbase? Who is the owner of Huobi? Who is the owner of Kucoin? Who is the owner of Poloniex? I can go on and list them all and have to say that I have no idea who the owners are, and I frankly do not care neither.

I can know if it is 17 years old or 70 years old and that is always the same, it is about the trust building and if a place builds a trust then they deserve my money. Look at binance, they had so many bad things happen, constant hacking attempts and many other things, and in the end they are doing fine. Which is why I believe it is really not a big deal that he was a kid, hell in a crypto type of business where most of us are on the younger side (people under 40 care for crypto, not people over 40) it is even a good sign. However they weren't trustworthy and that has nothing to do with age.

[7788bitcoin]

So this makes it the largest loss of bitcoin under such circumstances when you consider the contemporary value of the coins lost.  The exchange, Africrypt, told investors they were the victim of a hack and not to alert the authorities, you know, cuz that's super legitimate.  Some law firm attempting to investigate have tracked the stolen coins to tumblers and mixers to try and obscure where the stolen bitcoin was going.  I guess it remains to be determined if they were actually hacked or stole the money themselves, but the two founding brothers can't be found.

So another fishy situation where billions worth of Bitcoin is lost and the owners are missing and they are claiming it was a hack. How do they think they can get away with billions of dollars and it looks really fishy and we were not hearing about any major hacks for sometime and now this is a major theft/ hack situation and i really feel bad for the traders who held their coins in their exchange wallet.

[just_Alice]

Interesting case, I bet no one ever will break this record  
Though it is not yet clear who stole the money, I think it is obvious that a number of things here indicate the founders probably took the money themselves, especially the fact that they told customers not to report the incident, and that they disappeared. Why disappear?
I think we'll never hear about them again, that is enough money to change your identity, completely cover all tracks and start a new life.

[Baofeng]

It's a question whether where are the brothers right now?

Did they left South Africa, have plastic surgery, change their names, apply for a new password and have plastic surgery and now living in a third world country? hehehe.

Or will the victims hire a private investigators since the police can't do anything, or even a blockchain analysis to track where the coins are?

[arwin100]

Hard to conclude at this point, probably more of an exit scam, this is clearly a Ponzi scheme, and maybe just disguise to be a Bitcoin exchange to look legit to their investors. Unfortunately, they have fallen for the trap and the brothers disappear at this point.

So I don't know what will be the next course of actions for those who have victimised by the scams, until the bothers is found (dead or alive).

No matter what happens, it will still be the same. They still have stolen money from the people and I don't think that someone has stolen from them because it's pretty coincidental that they have disappeared when the money was stolen, this smells strongly of inside job.

This most likely an inside job since how could the founder disappear if he didn't do any anomaly? For his disappearance this confirm that he is primary involve on those rob out  so its really good for authorities to find him to know the real answer about the hacking issue unto them. I really believe that this is planned so provably they flee already and go overseas so that the victims will get a hard time to sue them on court.

[TimeTeller]

Interesting case, I bet no one ever will break this record  
Though it is not yet clear who stole the money, I think it is obvious that a number of things here indicate the founders probably took the money themselves, especially the fact that they told customers not to report the incident, and that they disappeared. Why disappear?
I think we'll never hear about them again, that is enough money to change your identity, completely cover all tracks and start a new life.

An inside job and a well-planned one. Why would they disappear if they are not guilty and if it is a real 'hack'?
They can cooperate with the authorities if the hack is real.
Sadly, another bad news for seemingly scam exit of a crypto exchange.
Another reminder that we should not store our coins to an exchange. Better store it on our own wallet.
This is one of the reasons why crypto is being tagged as scam by noncrypto users, because of incident like this.

[dunfida]

Why the founder have to disappear if he and his exchange are innocent! such a big hack has occurred and he just disappear into tin air, this is clearly an inside job and the actions of the founder looks very suspicious, and to top it all he instructed the victims not to alert the the authorities, who does that! joke of the century, i can't believe they go with such silly request,  another lesson learned, not your keys not your money saying.
between such a young guy in control of such huge amount of money, he his definitely bound to be tempted, the authority should fish him out ASAP.

I believe it is probably for their safety when people know the word of the news don't think people will just stay and keep silent of they knew their money was gone after getting hacked. I think there's someone who's powerful in politics is protecting them that's why they have to disappear but the question is who? And the recent hack event should have a follow-up investigation instead of letting them run away.

This case looks like a covert plan for someone to eventually going to show up. In any case the only problem people look here is how these young people owning or controlling an exchange on their own? Fresh as new as a kid when suddenly dazzled by money would eventually change them and that's the problem that's why they really need a guidance from someone who had experiences in terms of handling their own money.

[Sithara007]

It's a question whether where are the brothers right now?

Did they left South Africa, have plastic surgery, change their names, apply for a new password and have plastic surgery and now living in a third world country? hehehe.

Or will the victims hire a private investigators since the police can't do anything, or even a blockchain analysis to track where the coins are?

There was a similar incident a few years back in India.

https://www.theweek.in/news/india/2019/08/31/kingpin-of-485-crore-kerala-bitcoin-scam-murdered-in-dehradun.html

Back then, one of the exchange owner tried to double cross the co-owners, by claiming that the coins were hacked. His friends found out that he was lying and they tortured him to reveal what he did with the coins. The guy died during interrogation and the coins are all gone now. The co-owners are rotting in jail, with a prison sentence of 14 years slapped on each of them.

And what you have posted is not very easy to do. They may be able to travel to another country which doesn't have an extradition treaty with South Africa. But it is near impossible to hide their real identities. Eventually one of those bad guys who lost his money in Africrypt is going to track them down. Then it is going to be fun.

[Snappycoco]

That's the problem with centralised exchange. Once the founders is tempted to steal the money they have in their platform, they could run away with it and leave no trace. History really repeats itself. I just wish binance wouldn't do same thing with this. Lol.

[dmamigo]

That's the problem with centralised exchange. Once the founders is tempted to steal the money they have in their platform, they could run away with it and leave no trace. History really repeats itself. I just wish binance wouldn't do same thing with this. Lol.

I heard and then read on the internet it was an investment platform that fled with $3.6 billion of Bitcoin but here I see you guys are discussing about an exchange that I doubt.
People should not store cryptos on exchanges or wallets where the crypto owner does not hold total control of them.

Investors should not fall for these kinds of investment programs nowadays when so many scams are coming up frequently. Rather staking can be a good option where you will have complete control.

Binance is now so big with their own coin, I am doubtful of what you said about them running away. Also, they earn from us when we trade or perform activities to make money, so I believe they will not run away still I hope they don't because this is a very rough world.

[AicecreaME]

So this makes it the largest loss of bitcoin under such circumstances when you consider the contemporary value of the coins lost.  The exchange, Africrypt, told investors they were the victim of a hack and not to alert the authorities, you know, cuz that's super legitimate.  Some law firm attempting to investigate have tracked the stolen coins to tumblers and mixers to try and obscure where the stolen bitcoin was going.  I guess it remains to be determined if they were actually hacked or stole the money themselves, but the two founding brothers can't be found.

From Endgadget:

Cryptocurrency investors in South Africa may have lost nearly $3.6 billion in Bitcoin following the disappearance of two brothers associated with one of the country’s largest cryptocurrency exchanges. According to Bloomberg, a law firm in Cape Town says it can’t locate Ameer and Raees Cajee, the founders of Africrypt. In April, the exchange told its investors it was the victim of a hack and asked them not to report the incident to the authorities on account it would “slow down” the process of recovering their missing money.

Some of those involved in the exchange hired Hanekom Attorneys, the law firm that said it couldn’t find the two brothers, to investigate the incident. It found that someone had withdrawn Africrypt’s pooled funds from the local accounts and client wallets where the coins were stored originally and put them through tumblers and mixers, making it difficult (though not impossible) to trace the money. “Africrypt employees lost access to the back-end platforms seven days before the alleged hack,” the law firm told Bloomberg. The outlet attempted to call both Cajee brothers multiple times only to get their voicemail each time.

Complicating any recovery attempt is that South Africa’s Finance Sector Conduct Authority can’t launch a formal investigation into the incident because cryptocurrency isn’t legally considered a financial product in the country. If no one can recover the money, it will go down as the largest cryptocurrency loss in history, easily overshadowing the approximately $200 million CAD that disappeared when the founder of Canada’s QuadrigaCX exchange died while travelling in India.

Like what other people think, I also see this as an insider job. The timing of disappearance of the founders of the exchange after the hacking incident looks very suspiscious to me. It doesn't look like it is just a coincidence. I think it is planned. A well-executed escape after stealing all the money of its users. Certainly, its users must be regretting big time that they opted to store their funds in an exchange. A platform that doesn't allow you to have the full autonomy over your money is really risky when it comes to provided security.

To add, I think its really risky to let a teenager, not yet of legal age to handle a billion-worth business. It's nice that a teenager has a mindset of being business-oriented, however, they should have at least mentored him until he turned 18 years of age. I just hope that they would recover the funds though because it's a hefty amount.

[(o)(o)ilikeboobs(o)(o)]

Once again crypto traders must review their trading behavior. I call this CEO's disappearance with money a scam. It is now important to research an exchange's reputation before trading. Cryptocurrency-related loss events are becoming alarming lately.
AMM can be the next stop for traders.

[skarais]

It's strange why the big investor there are brave enough to hold most of their investment in this platform when I'm sure they know the risk of their investment.  Does the platform offer huge profit commonly known as ponzi scheme so that people are interested in depositing their asset there?

Having said that, the people whose money make up the $3.6 billion dollars prolly invested more than they can afford to lose,

Maybe that amount is the accumulation of the total price by the time bitcoin hit ATH at $65K. But now the number has dropped so that the amount of losses experienced by investors is no longer relevant today if bitcoin are still stored.

[Silberman]

So this makes it the largest loss of bitcoin under such circumstances when you consider the contemporary value of the coins lost.  The exchange, Africrypt, told investors they were the victim of a hack and not to alert the authorities, you know, cuz that's super legitimate.  Some law firm attempting to investigate have tracked the stolen coins to tumblers and mixers to try and obscure where the stolen bitcoin was going.  I guess it remains to be determined if they were actually hacked or stole the money themselves, but the two founding brothers can't be found.

Well, so we get to see yet another ‘hack’, unless it can be demonstrated this was the case I always think of an inside job before anything else as it is always the explanation that makes the most sense, and when we add that they are missing there are only two possibilities, they either were victim themselves or they are the ones that stole the money and could not resist to get it and now are living in a country where they cannot be extradited and they can live the rest of their lives in luxury.

[evilgreed]

               The fact that the founders themselves were telling the customers to not inform the authorities about the "hack" that has happened already placed a target sign on them. They had all the time in the world to prepare for such a feat but became impatient and did the scam half-assed. Lol. Now they have to live the rest of their lives in hudung because of this mistake. Even if they had planned things thoroughly, releasing such a statement was just ridiculously dumb. Literally no one would ever say such things if the "hack" that they were using as an excuse were really true. I hope they get caught and rot in jail for scamming people who did a lot of effort to gain capitals for investing in thus industry.

[Review Master]

TBH, it's more likely the insider job to do so. Just by looking at current market condition, those two founders on the run to liquidity those bitcoin as btc market is on correction mode. Also, it’s sure to be the biggest scam in crypto history. While other countries are busy to classify bitcoin as a legal tender, this type of scam will give opportunity to non-bitcoiners for making shit questions about crypto. But it's great for those to learn from this things or ponzi scheme so that they won't do that again in future.

[RealMalatesta]

The title is misleading, because this site is not an exchange.. but rather one of those scam investment companies that are using Bitcoin (Crypto currencies) as the investment option. This AfriCrypt fraud has been compared to the Mirror Trading International scam. (Ponzi Scheme) ==> Africrypt boasted returns of 2-11% a month 

Go read more at https://www.moneyweb.co.za/moneyweb-crypto/africrypt-hack-of-nearly-r54bn-dwarfs-mirror-trading/ and also see that Raees and Ameer Cajee – reportedly disappeared to the UK (A country from where they can be extradited to South Africa) 

That's less worrisome. I know it is still the same amount of money and it is still scam so I know most people will feel the same but I really do not. If you believe that someone can give you guaranteed income outside of legally bounded places (banks and so forth) then you are wrong and it is normal that you get scammed, not fair of course but it is still wrong.

There is a saying in my nation that goes "scammers who scam only other scammers are not scammers" or something like that (translation could be bad) and that is why I do not feel that bad about it. There is no legal organization that gives guaranteed income, all the places that you put your money into are the places that will end up not giving you the real returns and will scam you eventually. They are basically a ponzi scheme and that is how it will continue for a long time as well, there is no way around it.

[uneng]

The title is misleading, because this site is not an exchange.. but rather one of those scam investment companies that are using Bitcoin (Crypto currencies) as the investment option. This AfriCrypt fraud has been compared to the Mirror Trading International scam. (Ponzi Scheme) ==> Africrypt boasted returns of 2-11% a month 

Go read more at https://www.moneyweb.co.za/moneyweb-crypto/africrypt-hack-of-nearly-r54bn-dwarfs-mirror-trading/ and also see that Raees and Ameer Cajee – reportedly disappeared to the UK (A country from where they can be extradited to South Africa) 

That's less worrisome. I know it is still the same amount of money and it is still scam so I know most people will feel the same but I really do not. If you believe that someone can give you guaranteed income outside of legally bounded places (banks and so forth) then you are wrong and it is normal that you get scammed, not fair of course but it is still wrong.

There is a saying in my nation that goes "scammers who scam only other scammers are not scammers" or something like that (translation could be bad) and that is why I do not feel that bad about it. There is no legal organization that gives guaranteed income, all the places that you put your money into are the places that will end up not giving you the real returns and will scam you eventually. They are basically a ponzi scheme and that is how it will continue for a long time as well, there is no way around it.

How can you say people who invested on their platform were scammers? The exchange promised returns through trading bots which could generate that profit percentage monthly and uneducated investors believed that could be real. Maybe they were just naive or crypto newbies, but not scammers. I hope the police finds the two brothers and make them reveal the whole scheme, reaching to every thieves involved on this action, so the stolen money can be recovered and returned to the victims.