Ameer and Raees Cajee, founders of a South African cryptocurrency exchange disappeared earlier this year after telling investors they’d been hacked in April
The Bitcoin trader brothers, reportedly ‘fled South Africa with $3.6billion in stolen cryptocurrency
New report reveals they had bought citizenship to the Pacific Island of Vanuatu, and sold their belongings months before they reported hack of heir platform
‘Africrypt employees lost access to the back-end platforms seven days before the alleged hack,’ Bloomberg reports
Lawyers later discovered the digital coins had been moved, and staff had lost access to back-end platforms ahead of the alleged hack
Raees, 21, has strongly denied allegations of wrongdoing, claiming he and his brother are victims of ‘organised crime syndicates’
Two brothers accused of fleeing South Africa with $3.6billion in stolen Bitcoin had bought citizenship for the Pacific Island of Vanuatu months earlier, according to a report.
Raees Cajee, 21, and his 18-year old brother, Ameer, are founders of Africrypt, a cryptocurrency investment platform that the brothers told investors in April 2021 had been hacked and crypto-tokens stolen. Lawyers for investors have since alleged that the brothers “disappeared” with bitcoin valued at roughly $3.6bn.
The Cajee brothers disappeared earlier this year after telling investors their company had been hacked.
Africrypt – one of the country’s largest cryptocurrency exchanges – in April informed investors of the hack but asked that they not report it to police.
Back in April, as Bitcoin was rocketing to a record. Africrypt Chief Operating Officer Raees Cajee, the elder of the brothers, informed clients that the company was the victim of a hack. He asked them not to report the incident to lawyers and authorities, as it would slow down the recovery process of the missing funds.
Now it has emerged that Raees paid more that $130,000, for citizenship of Vanuatu in October 2020, with Ameer doing the same in January.
Raees and Ameer, who investors’ lawyers had been unable to reach for months, now claim they are victims of organized crime.
Amid allegations of wrongdoing, Raees in an interview with British Newspaper, The Guardian, also claimed that Africypt never had $3.6billion, telling the Guardian that the missing amount was no more than $5million.
The figure was initially reported by Bloomberg, which said that 69,000 coins had disappeared and estimated their worth based on the peak value of Bitcoin in April when the money went missing.
The brothers also promised to cooperate in any future enquiries and said they were preparing a dossier that would prove Africrypt had been hacked and that they had been stolen from.
Some investors retained law firm Hanekom Attorneys to investigate the incident and it discovered that Africrypt’s pooled funds had been withdrawn from the local accounts and client wallets, where the coins were originally kept, then put through tumblers and mixers – a.k.a. other large pools of Bitcoin – a process that severely complicates any attempt at tracing the money.
‘Africrypt employees lost access to the back-end platforms seven days before the alleged hack,’ Hanekom Attorneys told Bloomberg.
The incident was reported to Hawks, an elite national police force that tackles organised crime, economic crime, corruption, and other serious crime.
Police found that the brothers shed some considerable assets in the weeks before their disappearance, selling off their Lamborghini Huracan, a luxury suite at one of South Africa’s most expensive hotels and a rented beachside apartment in Durban.
Lawyers also alerted crypto exchanges worldwide to be on the lookout for attempts to convert the coins.
Raees has strongly denied any allegations of wrongdoing, while claiming that that Africypt never had $3.6billion [£2.5billion], telling the paper that the missing amount was no more than $4.95million.
In November 2020, investors reportedly began noticing strange transfers from their bitcoin wallets – siphoned off via various “dark web” technologies designed to render them untraceable, according to the specialist law firm representing Africrypts’ investors.
In May, Raees established a UK-based shell company, Clandestine Limited. For the new company registration, he listed his nationality as “Citizen of Vanuatu”. As the scandal broke in June, Raees resigned.
In an interview with the Wall Street Journal from an undisclosed location, Raees Cajee categorically denied they had absconded with the funds or any other wrongdoing, claiming they were forced to flee due to “death threats”, allegedly including by “organized crime syndicates”.
They are reported as saying the firm’s portfolio was never as much as $3.6bn and that no more than $5m is currently missing.
A lawyer for the brothers told the BBC that his firm was working to prepare a dossier to demonstrate to the authorities that Africrypt had been hacked and the brothers had been the victim of theft. – Raees and Ameer Cajee would cooperate with any future inquiries by the authorities, their attorney said.
South Africa’s Finance Sector Conduct Authority is looking into Africrypt, but cannot launch an official probe into the incident because cryptocurrency is not considered a legal financial product in the country, Bloomberg reported.
However, Gerhard Botha, a Johannesburg lawyer representing 58 investors, was able to obtain a provisional liquidation order against the fugitives to investigate. If the money is not recovered, the incident would be the largest-ever cryptocurrency loss in history.
Since January 2020, 2,000 people have purchased citizenship of Vanuatu, a remote Pacific island with a population of just 300,000, reports the Guardian. The government’s citizenship-by-investment (CBI) scheme allows anyone to apply for a passport by paying $130,000.
Successful applicants gain not only citizenship of the island, but also visa-free travel throughout the UK and EU.
CBI schemes are legal and relatively common in small countries including Malta and Grenada, though some larger countries such as Austria and Turkey also have such programs in place.
According to an analysis by Investment Migration Insider, the CBI scheme earned Vanuatu £72million – 42 per cent of all government revenue in 2020.
Notable among those who have purchased citizenship in Vanuatu recently are former Indian politician Vinay Mishra, who is accused of corruption, disgraced Syrian politician Alaa Ibrahhim, and former UN-backed Libyan Prime Minister Fayez al-Sarraj who lost out the power struggle after the demise of Mummar Gadhafi.
No specific suggestions that either Sarraj or his wife have been involved in any wrongdoing or criminal activity, or did anything improper in buying a Vanuatu passport. However, his probable status as a politically-exposed person (PEP) means that he would likely have faced more difficult hurdles or even been barred from applying to many countries offering citizenship-by-investment programs in the Caribbean or EU.
A politically-exposed-person is defined as someone considered more susceptible to bribery and corruption by virtue of their position.
Meanwhile Vanuatu’s Financial Intelligence Unit (FIU) pledged to undertake stringent checks on those named in the report. Director Floyd Mera has said that newly minted citizens with ‘substantial convictions’ could have their citizenships revoked.
‘Going forward, the FIU will conduct enhanced checks… If any of these persons have criminal convictions, FIU will promptly inform the Citizenship Office of the updated information,’ Mera said.