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South African crypto platform vanishes with $3.6 billion

Nearly $4 billion worth of bitcoin has vanished from a South African cryptocurrency trading platform, AfriCrypt, with the operators also nowhere to be seen.

A South African investment platform has grabbed headlines after 69,000 bitcoins (over $3.6 billion) vanished from the exchange, along with two brothers who owned the crypto firm. While the facts are still unclear, the signs indicate that it is an exit scam rather than a hack.

According to Bloomberg, if it turns out to be an exit scam, it would be the biggest in the history of the cryptocurrency market. AfriCrypt operated as an investment platform rather than a cryptocurrency exchange, promising users returns of up to 10% a day.

This is a warning sign that the platform is probably a scam as it is impossible to make such a promise due to the nature of the cryptocurrency market. Bitcoin is down by over 40% since its all-time high a few weeks ago. Hence, achieving 10% in profits per day seems unattainable.

AfriCrypt has been around since 2019 and is owned by brothers Ameer and Raees Cajee. The platform controlled around 54 billion Rands worth of BTC, or $3.6 billion a few weeks ago. On 13 April, the platform sent a message to investors that it had been hacked.

The platform said it would suspend operations and try to retrieve stolen funds and compromised information. South African law firm Hanekom Attorneys, which represents the affected users, said suspicions arose from the message sent to the investors. AfriCrypt told its investors they could seek legal counsel but warned that doing so could delay the recovery process.

The law firm said, “We were immediately suspicious as the announcement implored investors not to take legal action. AfriCrypt employees lost access to the back-end platforms seven days before the alleged hack.”

The attorneys said the brothers sent out 69,000 bitcoins from AfriCrypt’s accounts and client wallets. To conceal the transactions, they used various dark web tumblers and mixers to ensure the funds are untraceable.

Since the incident, the brothers have been unreachable, and the AfriCrypt website has been down since. South Africa’s Gauteng South High Court has ordered the brothers to respond to a provisional liquidation order before 19 July.

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