69,000 Bitcoin worth $3.6 Billion Lost in South African Crypto Scam

It is suspected to be a money-laundering operation for international players. While South Africa’s FSCA is looking into Africrypt, they don't have jurisdiction as crypto assets are not legally considered financial products.


A whopping 69,000 Bitcoin worth $3.6 billion has been lost in a scam by cryptocurrency investment platform, Africrypt.

A pair of South African brothers have been reported missing with the money. A Cape Town law firm, Hanekom Attorneys, hired by investors has reported the matter to the Financial Sector Conduct Authority (FSCA), the SA Reserve Bank, and the Hawks, an elite unit of the national police force.

Back in April, when the price of Bitcoin surged to an all-time high of about $65k, the elder brother, Africrypt Chief Operating Officer Ameer Cajee, said the company had been a victim of a hack. He then asked the client not to report the incident to lawyers and authorities, saying it would slow down the recovery process of the missing funds. Their notice from April 13 reads,

“We urge all clients to please be patient as we attempt to resolve the situation at hand. It is understandable that clients may proceed the legal route. but we ask clients to please acknowledge that this will only delay the recovery process.”

This made the investigators suspicious, and Hanekom Attorneys, along with a separate group, has started liquidation proceedings against the exchange.

“Africrypt employees lost access to the back-end platforms seven days before the alleged hack,” said Hanekom Attorneys.

According to the investigation, the pooled funds of the platform were transferred from South African accounts and client wallets to other large pools of bitcoin while using mixers to make them untraceable.

A Money-laundering Operation?

Founded in 2019, Africrypt’s website is now down, which used to state,

“Africrypt's astronomical growth from a one-man operation running out of a bedroom, to one of Africa's largest and most successful Al trading companies in only a few years.”

According to Darren Hanekom of Hanekom Attorneys, the fact that such a low-key crypto company had crypto assets of nearly R50 billion, it is unlikely all these funds came from South Africans, rather more likely be a money-laundering operation for international players.

Additionally, clients were requested to sign an investment agreement with Hong Kong-based RaeCreateWealth Limited, which also raises suspicions.

Customers were also required to deposit funds into an FNB account which would then be used to purchase BTC, often on Luno, and after that, the crypto would be broken up and mixed with other transactions.

Just last year, another South African Bitcoin trader, Mirror Trading International, collapsed in what was called the biggest crypto scam of 2020, involving 23,000 digital coins worth about $1.2 billion.

But Africrypt is three times bigger than Mirror.

In January this year, the daily value of crypto-asset trading exceeded 2 billion rands ($141 million) for the first time in the country.

While FSCA is looking into Africrypt, the regulator’s head of enforcement, Brandon Topham, said they are currently prohibited from launching a formal investigation because crypto assets are not legally considered financial products.

“We don’t have jurisdiction, but we are looking at complaints to see if there is a financial product hidden in there,” said Topham.

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