South African police launch investigation into possible fraud by Africrypt founders

South African authorities (SA) have begun investigating a number of criminal cases filed at the request of investors in the bankrupt cryptocurrency platform Africrypt. Bloomberg reports.

Claimants seek fraud charges and the arrest of Africrypt’s founders, brothers Amir and Reis Kaegi.

The police are examining the circumstances of the incident.

In April 2021, Africrypt ceased operations, saying it had been hacked. Amir and Reis Kaegi disappeared, as did the firm’s customer funds. Initially, media reported that customer funds in the company’s reserves totaled $3.6 billion.

Hanekom Attorneys, hired to investigate victims of Africrypt’s bankruptcy, claimed that the brothers used mixing services to conceal traces of fraud.

The founders rejected the allegations and said that the amount under Africrypt’s management was significantly lower. According to Reis Kaegi, it amounted to just over $200 million.

He also said that the brothers were in hiding due to death threats.

In November, an unidentified investor said he intended to buy 51% of Africrypt on condition that the criminal cases against the Kaegi brothers be dropped. He also proposed appointing them as the firm’s leaders again.

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