This is the biggest “Exit Scam” in cryptocurrency history. Two young South African brothers, Ameer Cajee (20) and Raees Cajee (17), creators of the Africrypt platform, a cryptocurrency investment platform launched in 2019, are unreachable and untraceable. Their platform had not been functional since April when they hosted 69,000 bitcoins, or the equivalent of 3.6 billion USD in investment, Bloomberg reported on June 23, 2021.
According to the Financial Sector Conduct Authority (FSCA), the South African regulator, the platform offered exceptionally high and unrealistic returns similar to those offered by illegal investment programs commonly known as Ponzi. Indeed, Africrypt promised a minimum return equivalent to 5 times the amount invested. Which seemed disproportionately attractive, making this the most popular platform in the country and attracting a lot of high net worth investors who wagered over $ 120,000.
The discovery of the pot aux roses
It all started when in mid-April 2021, Ameer Cajee informed by email the subscribing customers of Africrypt, the company he co-runs with his brother Raees, that their digital infrastructure had been the victim of a cyberattack that leads to the stealing of the cryptocurrencies they have invested. While reassuring its customers not to panic and above all, not to warn the South African authorities, because according to them, this would risk compromising their strategy to recover the funds stolen by the pirates. The Africrypt site then becomes inaccessible, and customer accounts are also frozen.
Almost three months later, completely at a loss and having invested considerable sums, some clients who were at the end of their patience approached Hanekom Attorneys, a law firm. “Africrypt employees had already lost control of the platform for a week when customers were notified, while funds were withdrawn from their accounts to be transferred to services making them untraceable”, relates the firm before subsequently alert the South African police.
The legal vacuum surrounding the South African blockchain
The only problem is that the financial sector regulatory authorities in South Africa have not yet legislated on financial products related to cryptocurrencies since cryptocurrency assets are not considered by South African financial legislation as products. financial. Despite the robbery or “Exit Scam” of the century, unbelievably and terrific as it sounds, local authorities cannot intervene or consider legal action. Police cannot open an investigation against Africrypt or issue an arrest warrant against its founders. “All we could do was examine the complaints,” the South African regulator tries to reassure.
The FSCA has confined itself to educating the South African public, urging them to understand that “unrealistic and high returns suggest that the investment program is likely to be fraudulent. She also announces that she has taken steps to ensure that crypto assets are declared financial products. However, the authorities specify, the regulation of the cryptocurrency sector will be done gradually. This suggests that South Africa is not encouraging investment in this sector and seems rather reluctant and dissuasive at the moment. Legislation will therefore take some time yet before offering a booming sector all the legal and optimal guarantee for securing investments.
The “Africrypt” case and other far lesser cases represent a serious track record, as the legal vacuum will turn South Africa into the new El Dorado of cryptocurrency cyber-ransomings and “Exit-Cams.” A situation that risks hampering the development of blockchain in one of Africa’s leading economies, a member of the G20.
The American Alternative
Cyber security specialists agree on the fact that cyber attacks, ransomware or “Exit-Cams” as the case in point, are generally coordinated operations, involving several infrastructures and several groups of hackers operating in several geographical areas. at different stages and levels of intervention. This suggests that, given the scale of the hijacking, the two Cajee brothers probably did not act alone and that they received outside help from other cybercriminals specializing in “exit scams”. The only plausible alternative at this time to trace the funds of Africrypt clients who have vanished with their promoters remains international cooperation. In particular with the American intelligence services and the American Federal Police (FBI).
The latter, under the leadership of the US Department of Justice, managed at the beginning of June, to recover part of the ransom paid to Russian cybers-ransomers of Dirkside by Colonial Pipeline (75 Bitcoins), during the ransomware suffered last month at United States by the American oil pipeline giant. Of the 4.4 million SUD paid by Colonial Pipeline, 2.3 million were recovered and returned, or 63.7 bitcoins seized out of the 75 paid.
