Sibling Investment Firm Founders Vanish With Record $3.6 Billion in Bitcoin

News
By Zhiye Liu
published

Gone with the wind. Once again.

Bitcoin removed from a safe
(Image credit: Shutterstock)

According to a Bloomberg report, Raees (20) and Ameer (17) Cajee, two South African brothers that founded Africrypt, have disappeared with $3.6 billion worth of Bitcoin. The alleged scam represents the biggest heist in cryptocurrency history, even larger than the $2 billion that recently vanished in Turkey.

Back in April when Bitcoin was skyrocketing, Ameer, the cryptocurrency investment company's CEO, informed Africrypt's investors that the company was reportedly hacked. He told them not to report the occurrence to the authorities or their lawyers, since it would only hamper the recovery process.

There is every indication that it was an inside job. Africrypt employees had lost access to the trading platform a week prior to the so-called hack. The siblings reportedly fled the country a few days before the hack as well. Africrypt's website went offline afterward, and the Cajee brothers were unreachable via their mobile numbers.

A group of worried investors have hired Hanekom Attorneys to look into the matter. According to the law firm's investigation, the scammers moved the pooled funds from Africrypt's South African accounts and clients' wallets to bitcoin tumblers and mixers. Therefore, the funds are almost impossible to trace.

South Africa’s Finance Sector Conduct Authority (FSCA) is examining the Africrypt situation, but it didn't exactly launch a formal investigation. Unfortunately, cryptocurrency assets don't fall into the category of financial products in South Africa. Therefore, the FSCA doesn't have jurisdiction on the matter. However, the report has been handed over to The Hawks, a specialized police unit that combats organized crime.

This isn't the first time a South African Bitcoin trader has made the headlines. Just last year, the now-defunct Mirror Trading International (MTI) scammed investors out of 23,000 bitcoins, the equivalent to $1.2 billion. The only upside of all this that we can think of: No one needs to resort to guns or violence for this kind of heist. A few clicks here and there and you're broke and someone else is a multi-billionaire.

Zhiye Liu
Zhiye Liu
RAM Reviewer and News Editor

Zhiye Liu is a Freelance News Writer at Tom’s Hardware US. Although he loves everything that’s hardware, he has a soft spot for CPUs, GPUs, and RAM.

15 Comments Comment from the forums
  • Heat_Fan89
    Nice to see it wasn’t the Nigerian cousin‘s who will happily wire you money when you ship their Craigslist items.
    Reply
  • digitalgriffin
    They are dead men. You don't defraud people like that without someone putting a price on your head.

    Like drug dealers they will get complacent, flaunt money. Raise eyebrows and get knocked off.

    There's no point in stealing that much. You could spend almost a million a day and not run out of money for 7 years. And that's if you do t invest it.
    Reply
  • amkangas
    Not your keys not your coins. People are stupid to leave their crypto on any type of exchange.
    Reply
  • dwd999
    One thing I can never understand about these crypto billions, maybe someone can explain it to me:
    eventually it will most likely be necessary to convert these crypto billions into real world national currencies. How would they do that? Most exchanges seem to have limits on the amount that can be converted at one time. For example, if I understand it correctly, Coinbase has a $25,000US daily limit on withdrawals. So it would take them more than a lifetime to convert all the bitcoins to real cash, since the US dollar is still the basis for most of the world's financial transactions. But I'm guessing that my thinking is too limited and old world on this matter. I must be missing something.
    Reply
  • USAFRet
    dwd999 said:
    One thing I can never understand about these crypto billions, maybe someone can explain it to me:
    eventually it will most likely be necessary to convert these crypto billions into real world national currencies. How would they do that? Most exchanges seem to have limits on the amount that can be converted at one time. For example, if I understand it correctly, Coinbase has a $25,000US daily limit on withdrawals. So it would take them more than a lifetime to convert all the bitcoins to real cash, since the US dollar is still the basis for most of the world's financial transactions. But I'm guessing that my thinking is too limited and old world on this matter. I must be missing something.
    You don't convert it directly into "money", and go down to the yacht store.

    You use that theoretical money as leverage.
    Or, I'm quite sure you can find some shady real estate developers to convert some of that to property, etc.

    "Stealing" $3.6B, if you only manage to convert 10% of that to money....that is still $360 million free.
    Reply
  • InvalidError
    dwd999 said:
    eventually it will most likely be necessary to convert these crypto billions into real world national currencies. How would they do that?
    Same way that organized crime gets rid of dirty money that may be tracked: money laundering.

    The article says stolen BTCs have already gone through "tumblers and mixers" to make them more difficult to track, the next step is to build a sufficiently large network to bring in fresh "clean" cash and BTCs while trickling out the diluted dirty stock to avoid attracting unwanted attention.

    I bet we'll see many more exchanges mysteriously go poof due to shady operators wanting to cash out before crypto values collapse.
    Reply
  • Math Geek
    they don't have to cash it all out themselves. just like any business it is easy to create any number of shell companies to spread the BT out and cash it faster. the system is already in place to easily hide and shift large sums of money around the world. they just have to tap into the same tactics apple/google/facebook/etc etc etc use every day to hide their billions from the various countries that want to tax it.
    Reply
  • dwd999
    Thanks! for all the advice. But I guess I'm just too old and simple minded to devote thought and effort to such things. So its for the best that I never got involved in these things, and certainly won't after this cautionary tale. For people like me, I won't care about crypto until I can transfer unlimited amounts of money to my bank account just as easily as my mutual fund account.
    Reply
  • everettfsargent
    You can't make this stuff up ... oh wait ... you can make this stuff up. Figuratively and literally.
    Reply
  • watzupken
    Its funny people fiddling with Bitcoin in hopes that they will strike it rich end up making other people rich in this case. And again, this is not a remote case as we have seen many like this before. So the only winners with cryptocurrencies, criminals and terrorist.
    Reply