Brothers accused of vanishing with $4.8b in bitcoins had made earlier 'hack' claim

The Cajee brothers had claimed in 2019 that another crypto scheme they had going was also hacked.
The Cajee brothers had claimed in 2019 that another crypto scheme they had going was also hacked.PHOTO: REUTERS

SINGAPORE - The Cajee brothers, accused of vanishing along with some US$3.6 billion (S$4.8 billion) in bitcoins from their Africrypt cryptocurrency platform, had claimed in 2019 that another crypto scheme they had going was also hacked.

Mr Ameer Cajee, 18, and Mr Raees Cajee, 21, have not been seen since they told their investors in April that their Africrypt platform, which reportedly counted several high-profile South Africans and celebrities among its investors, had been hacked.

If it is true that a staggering US$3.6 billion has gone missing, according to lawyers for Africrypt investors, this could be the biggest crypto heist in history.

For the whole of last year, losses in the crypto sector through fraud and other crime were US$1.9 billion, down from a record of US$4.5 billion in 2019, according to crypto intelligence company CipherTrace.

Police have launched an investigation and said the brothers sold their Lamborghini Huracan, a luxury suite at one of South Africa's most expensive hotels and a rented beachside apartment weeks before their disappearance.

South African news site MoneyWeb reported on Tuesday (June 29) that this is the second hack the Cajee brothers have claimed. In a letter to clients in May 2019, the brothers said another investment platform they ran was also hacked and emptied of all bitcoins, which they blamed at the time on a breach of their biggest trading partner, Binance.

The letter sent to clients after the first "hack" was similar to that sent to Africrypt's clients on April 13 following the latest "hack", said MoneyWeb.

It gave no details of how much money was missing and warned clients that trying to get their money back using lawyers would "only delay the recovery process".

Lawyers for the brothers, meanwhile, said on Monday that their mandate to assist them has been terminated. The statement came just two days after their public defence of the brothers.

Mr Raees Cajee told Dow Jones on Monday, from a location he would not disclose, that only about US$5 million was missing, a fraction of what was reported. But MoneyWeb reported that just one address of several that were hacked had a balance of more than 71,000 bitcoins, worth about US$2.4 billion.

MoneyWeb quoted Mr Darren Hanekom of Hanekom Attorneys, representing some investors, as saying it was unlikely all the funds came from South Africans, and that it was more likely a money laundering operation for international players, of which the Cajees were just a part.

Mr Hanekom also said Africrypt bore all the hallmarks of a scam, with the Cajees posting pictures of their luxury cars and boasting on social media about their extensive experience in cryptos.

In an investor presentation, Africrypt boasted returns of 2 per cent to 11 per cent a month depending on whether its clients chose a passive, passive-aggressive or aggressive portfolio. In the 20 months to August last year, there was not a single losing month.

"This entity was offering exceptionally high and unrealistic returns akin to those offered by unlawful investment schemes commonly known as Ponzis," South Africa's Financial Sector Conduct Authority said last week.

"The public is urged to understand that unrealistically high returns suggest that the investment scheme is likely to be fraudulent."