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$3.6 Billion Crypto Theft: South African Bank Denies Relationship With Fraud Accused Africrypt

According to local media, leading South African financial institution FNB is denying allegations of a banking relationship with the recently collapsed crypto investment company, Africrypt.

Africrypt Stops Operations Abruptly

Africrypt abruptly ceased operations nearly two months ago, prompting the banking institution’s denial. The crypto investment firm’s management claimed at the time that Africrypt’s trading system had been hacked. According to the directors, the cyberattack impacted client accounts, wallets, and nodes, causing Africrypt to freeze all accounts.

Announcing the “hack”, Africrypt said: “We regret to inform you that due to the recent breach in our system, client accounts, client wallets and nodes were all compromised …

“Unfortunately, this has forced Africrypt to halt operations … We urge all clients to please be patient as we attempt to resolve the situation. 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.”

However, shortly after the so-called breach, Africrypt directors Ameer Cajee and his brother Raees Cajee are alleged to have “transferred the crypto investment’s pooled funds from its South African account(s) through bitcoin on the blockchain in April 2021.” South African media reports estimate that as much as $3.6 billion in investor funds cannot be accounted for.

Meanwhile, FNB spokesperson Nadiah Maharaj declined to accept the existence of any relationship between FNB and Africypt in answer to a media query. Maharaj, who cites client confidentiality limitations in a media story, said:

“FNB once again confirms that it does not have a banking relationship with Africrypt. Due to client confidentiality, FNB cannot provide any information on specific bank accounts.”

When approached for comment SA Reserve Bank (SARB) senior media relations co-ordinator Ziyanda Mtshali said crypto-related matters fell under the Financial Sector Conduct Authority (FSCA), however, the FSCA denied having jurisdiction.

“The Intergovernmental Fintech Working Group – which includes the SARB, the National Treasury, the SA Revenue Service, the FSCA, the Financial Intelligence Centre, the National Credit Regulator and the Competition Commission – is busy finalising an updated South African position paper on crypto assets.

“The position paper makes various recommendations around how to bring crypto-assets within the South African regulatory remedy in a phased and structured manner,” said Mtshali.

Flee After The Heist

According to local media reports, the Cajee brothers escaped to the United Kingdom after successfully siphoning monies from investors. Another study conducted by Hanekom Attorneys, a law company hired by victims of the Africrypt hoax, backs up these conclusions. In addition to these facts, the law firm’s investigations reveal that Africrypt directors attempted to disguise the movement of cash by using mixers.

While the case has now been reported to the Hawks (South Africa’s elite police unit), the founder of the law firm, Darren Hanekom, is quoted in the report as suggesting Africrypt’s accounts with FNB have already been “drained” and that “the entirety of investors’ funds” may have been subjected to the mixing service.

Source: Bitcoinist