Africrypt founders who defrauded South African retail investors 70,000 BTC in 2021 are being investigated by Swiss authorities for money laundering.
The Africrypt scam
A report on April 23 shows that Ameer and Raees Cajee, the brothers behind Africrypt, surfaced in Switzerland two years after scamming investors off their hard-earned coins. Africrypt launched in 2019, allowing investors to reap huge rewards from the then-rallying cryptocurrencies.
In 2021, at the height of the bitcoin (BTC) and crypto bull run, Africrypt claimed that their crypto management platform had been hacked and 70,000 BTC siphoned by attackers. By the time of the “hack”, Africrypt managed a whopping $3.6b.
Even though the amount lost was worth billions of dollars, it was bizarre that they didn’t want police involved because law enforcement would “slow down fund recovery”.
The unrefined nature of South Africa’s regulatory environment, especially on cryptocurrencies, couldn’t help. The Finance Sector Conduct Authority of South Africa, though looking at Africrypt, couldn’t open a formal investigation because cryptocurrencies, including bitcoin, are not considered to be financial products. Their investigation on Africrypt has since been concluded.
Although there were regulatory challenges in 2021, this didn’t stop some suspicious investors from reporting Africrypt to authorities and even roping in the services of a law firm, Hanekom Attorneys.
Seven days before the alleged hack, Africrypt investors had already lost access to the platform’s backend. Therefore, they couldn’t track their investment performance in the booming market.
Investigation in Switzerland
Hanekom Attorney’s investigation revealed that Africrypt’s pooled funds had been transferred and passed through mixers to hide their trails.
Considering the transparent nature of public blockchains, hiding tracks of fund transfers is virtually impossible. The transparent nature of Bitcoin helped investigators reveal that Africrypt’s loot had first ended up in Dubai before it was passed through mixers.
Two years later, the brothers aroused suspicion when they rented a locker in Zurich, Switzerland, and deposited a hardware wallet. Hardware wallets are devices used to store a cryptocurrency’s private keys. They are usually used by individuals hoping to hold a huge amount of coins.
Swiss authorities got wind of and are now investigating the two brothers on suspicion of money laundering.