AfriCrypt - Afrikan Heroes

Liquidators of Africrypt Gets Additional Powers to Pursue Missing Funds

August 3, 2021

The high court has granted the liquidators of Africrypt additional powers to track down missing funds, and to sell assets and property belonging to the company.

It could be recalled that Africrypt is a crypto investment scheme headed by Raees and Ameer Cajee, was supposedly hacked in April 2021 and its digital wallets emptied of more than R40-billion in bitcoin. Forensic investigator Hamilton Cheong and Darren Hanekom, the attorney representing some Africrypt clients, have raised doubts as to whether it was a hack, given the fact that funds were depleted from Africrypt-controlled wallets months earlier.

Raees and Ameer Cajee, co-founders of Africrypt

The brothers fled South Africa after the alleged hack, claiming they feared for their lives after receiving death threats. Raees Cajee emerged from hiding in Tanzania last month to depose an affidavit opposing the final liquidation of the company, arguing that the alleged hack originated out of a Ukrainian IP address, and that investors had no claim against the company and “it is in the nature of investments that they can be lost”.

The company was placed in provisional liquidation on 26 April after investor group Badaspex launched a liquidation application. A statement issued last week by the liquidators’ legal representative, Ruann Kruger, says the business model of Africrypt “required investors to deposit fiat currency with Africrypt, who used the fiat currency to purchase crypto assets on a number of asset exchanges, and promised investors exorbitant returns of up to 10%/day on their investments.

“There is no evidence that this was indeed a hack of the Africrypt systems, and in support thereof it seems that funds were depleted from the Africrypt wallets four months before the alleged hack.”

Africrypt was placed in provisional liquidation on 26 April after investor group Badaspex launched a liquidation application and obtained a provisional order.

The court-appointed liquidators – Eugene Januarie and Welcome Jacobs – say directors of Africrypt intentionally failed to co-operate and are deliberately hampering the investigations into the affairs of the company. An enquiry into the whereabouts of the assets must now be held to ascertain what happened to the funds and to determine what can be recovered.

“There exists a high probability that assets and funds were moved from the business of Africrypt into the names of the directors, related companies and close corporations to the detriment of creditors, and requires urgent investigation,” says the statement.

“The so-called breach occurred on 12 April 2021, causing a loss of approximately R84-million, although an amount of R200-million had been received and invested on behalf of investors.”

This raises questions as to the status of the remaining R116-million (being the difference between the claims of R200-million received and the reported loss of about R84-million), and whether this includes gains and losses from investment, as well as withdrawals.

The liquidators also want to know why no communication has been issued by Recreate Wealth (Pty) Ltd or ReaCreate Wealth Limited, the two Hong Kong-based companies that were the legal entity that contracted with Africrypt clients.

With the liquidator’s extended powers, they will be able to investigate and interrogate the relevant parties…

“With the liquidator’s extended powers, they will be able to investigate and interrogate the relevant parties, directors and their related companies during the enquiry to uncover the mystery behind this ostensible ‘bitcoin heist’.

“The liquidator’s main objective is to track down assets, attempt to gain access to Africrypt systems and their source codes to recover bitcoin wallets and funds invested and lost by investors.

“In this endeavour, the liquidators have further secured the services of Mahier Tayob of Tayfin Forensic Investigative Auditors to conduct forensic investigations into the affairs of Africrypt and related entities.”

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

How AfriCrypt Founders Disappeared With $4 billion in South Africa Cryptocurrency Scam

June 28, 2021

AfriCrypt co-founder Ameer Cajee and Raees Cajee

Cryptocurrency investors in South Africa are facing a possible loss of nearly $4 billion in Bitcoin (BTC) after the disappearance of the founders of AfriCrypt, one of the country’s largest cryptocurrency platforms, vanished with their funds.

AfriCrypt was founded in 2019 by two brothers, Ameer Cajee and Raees Cajee but last week they were reported missing, together with 69,000 bitcoin worth roughly $4 billion of investors money.

In April, the exchange reportedly told its investors that its trading system was hacked and asked them not to report the incident to the authorities as it would “slow down” the recovery process. After the disclosure, Africrypt investors, which included several high-profile figures, celebrities, and high-net-worth individuals, lost access to the system’s back-end.

Some investors who were affected then hired Hanekom Attorneys to investigate the incident. Bloomberg cited the Cape Town-based law firm as saying it could not locate Ameer and Raees.

Hanekom, however, 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 web tumblers and mixers, making it near impossible to trace the money.

The Cajee brothers reportedly transferred the pooled funds from a South African account before fleeing to the United Kingdom within days of the supposed hack. They are also alleged to have taken down the website and disconnected all contact, including their phone numbers.

According to the law firm, the scammers were “reckless enough” to drain the investors’ funds into some of the wallets that they had been using while simultaneously operating the scam and claiming to be hacked.

The Africrypt fraud is just one of the many massive crypto scams South Africans have suffered from in recent times. However, it could go down as the biggest cryptocurrency heist in history if the pooled funds are not recovered.

It is significantly larger than the approximately $200 million CAD that disappeared when the founder of Canada’s QuadrigaCX exchange died in India as well as the massive South African Mirror Trading International (MTI) scam that made off with close to $1 billion from over 260,000 investors.

According to reports, Ameer described himself as somewhat of a digital currency guru. In one of the pitches to investors, he reportedly said he first heard about BTC back in 2009 while watching the news with his father and had been hooked since. He was only 8 years old at the time.

He also claimed to have started mining ethereum (ETH) while in school and developing his own AI-powered trading algorithm. “It was this dynamic and innovative trading system that has fuelled Africrypt’s astronomical growth from a one-man operation running out of a bedroom to one of Africa’s largest and most successful AI trading companies in only a few years,” he was quoted as saying to investors.

Africrypt, as with many other scams, promised ridiculous returns. Sometimes, it claimed it could offer 10% daily Return on Investment (ROI). The pitch was able to lure wealthy investors with many clients investing upwards of $105,000 while some went as high as $1.4 million.

Recovery attempts will be complicated by the fact that cryptocurrency isn’t legally considered a financial product in South Africa. The country’s Finance Sector Conduct Authority (FSCA) has said it can’t launch a formal investigation into the incident as no recognised financial product or services were provided.

However, Hanekom has notified South Africa’s “The Hawks”, a priority crime investigation unit, while exchanges around the world have also been informed of the supposed theft in case the brothers attempt to convert any coin. Also, a separate group of affected investors has started liquidation proceedings against the company.

Meanwhile, South African authorities have moved to embrace cryptocurrency trade and investment laws. A recent release of a position paper said that crypto assets will be brought into the regulatory scope in a “phased and structured” manner. The landmark Africrypt scandal is likely to further speed up the process.