Africrypt founders deny $3.6bn fraud allegations

The founders of the now-bankrupt crypto investment firm Africrypt, Amir and Raees Kaagee, “categorically rejected” allegations of deceiving clients. They attributed the collapse to a hacker attack, according to the BBC.

Representing the brothers, lawyer John Oosthuizen said that his clients did not file a police report after the incident. They reportedly received threats of physical violence and decided to safeguard themselves and their families, the lawyer added.

He said the brothers were willing to cooperate with the investigation after receiving the appropriate notice, but did not disclose their whereabouts. Oosthuizen called the accusations against Africrypt’s leadership unfounded.

In April, the firm abruptly ceased operations, citing a breach of its trading system. According to its representatives, the cyberattack affected clients’ accounts, wallets and nodes.

According to media reports, user funds in the company’s funds stood at $3.6 billion. After the alleged breach, Amir and Raees Kaagee moved Bitcoin investments to their own wallets, journalists claimed.

An anonymous investor interviewed by the BBC said that the losses were much lower than the announced amount. The broadcaster also cited an archive of Africrypt’s website, where the firm’s AUM was listed at $100 million as of January 2021.

Earlier, a South African intergovernmental working group proposed tightening regulation of the country’s cryptocurrency industry.

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