Africrypt is a South Africa cryptocurrency platform with suspicions of being in operation and run by fraudulent individuals. Hence, investors are pushing for criminal charges against the individuals in a case that might prove challenging to prosecute.
Africrypt is in operations by two brothers Raees Cajee and Ameer Cajee, age 21 and 18 years respectively. Investors of the company are seeking the arrest of these brothers who are now on the run since the scandal broke.
Despite being on the run, a mystery benefactor has surfaced to help repay some of the lost cash.
The Africrypt Crisis
In April, $3.6 billion worth of Bitcoin disappeared from the Africrypt platform after which the operators vanished without a trace. The information given to clients is that the platform was a victim of a hack and urged them not to report the attack to the authorities.
Although, the lawyer representing the company at the time of the incident disputed the amount said to be missing.
The investors are pushing for the brothers to face the law for theft, fraud, money laundering as their actions portray that. If prosecuted, the brothers can get 10-15 years for a first-time offense.
The Prosecution Process
According to Sean Peirce of Durban-based Coast to Coast Special Investigations, a final decision to go ahead with any prosecution is still underway.
If the authorities are set to go ahead with plans to prosecute, there could be an arrest warrant early this year.
Pierce is representing some of those who lost money and wants the matter settled as soon as possible.
However Africrypt’s lawyer, Rashaad Moosa said prosecution may run into headwinds. This is because lots of the investors agreed to transfer their claims to a Dubai-based firm while signing an agreement with the company.
The firm, Pennython Project Management LLC is offering some payouts to investors. Thereby making it impossible for investors to have no right to any interest or even push for civil or criminal proceedings.
If the state is willing to probe further, Moosa said;
“The state will have to call the party or investors who allege they have suffered loss but, most parts of the claims are now on Pennython”
Despite the whereabouts of the Cajee brothers still unknown, Pennython is willing to offer about 70% rand to affected investors.
Pennython says the reason for the bailout is the interest in the proprietary software that belongs to Africrypt. Though, this motivation seems gloomy.
Even though many “investors that I represent got paid out some money,” said Peirce. Yet, “we are still pushing forward with the criminal case as there is still money lost.”
The Africrypt fallout is revealing the lack of scrutiny over the country’s burgeoning crypto industry. The industry is booming in popularity since the surge in Bitcoin price about a year ago.
Another South African crypto company, Mirror Trading International, collapsed in 2020, with losses totaling about $1.2 billion.
There are plans by the country’s financial regulator to unveil a framework covering cryptocurrencies early this year. This will help protect vulnerable members of society, it said last month.
There has been cooperation between the investigators and South African authorities. This includes the Hawks and the National Prosecuting Authority, said Peirce.
The mystery investor is asking that any criminal complaints be dropped if an agreement was reached during a liquidation process, though Peirce said that’s not an option.
Peirce came in through one of his friends who also put money in the venture to help investigate Africrypt and build a criminal case. Seeing this, other investors in the Durban area bought the plan to try and get the brothers to face the law.