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<ul class="summary-list"><li>The lawyers for the two brothers involved in what could be the world's largest <keyword id="11502633" type="UNKNOWN" weightage="60" keywordseo="crypto-heist">crypto heist</keyword> have been removed from the case. </li><li>The South-Africa based lawyers told Bloomberg their mandate to assist the brothers has been terminated.</li><li>The <keyword id="11538187" type="UNKNOWN" weightage="60" keywordseo="cajee-brothers">Cajee brothers</keyword> and the estimated $3.6 billion in <keyword id="6354947" type="UNKNOWN" weightage="60" keywordseo="bitcoin">bitcoin</keyword> are still nowhere to be found.<a href="https://www.businessinsider.com/?hprecirc-bullet"></a></li></ul>The lawyers for the <a href="https://markets.businessinsider.com/currencies/news/south-african-brothers-billions-bitcoin-disapper-crypto-heist-2021-6-1030548585">two brothers who have been accused of vanishing with an estimated $3.6 billion</a> in bitcoin told <a href="https://www.bloomberg.com/news/articles/2021-06-28/missing-brothers-lawyers-terminated-from-s-africa-bitcoin-case">Bloomberg</a> on Monday their mandate to assist the brothers has been terminated. "Our mandate to assist the Cajee Brothers has been terminated," John Oosthuizen, a South Africa-based attorney, said in an email to Bloomberg, when asked for comment on the brother's whereabouts. "I look forward to reading your reporting on the Africrypt saga further."The statement from Oosthuizen came just two days after he publicly defended Ameer Cajee and his younger brother, Raees Cajee. The brothers have not been seen since they told clients that their cryptocurrency investment app Africypt had been hacked in April. The brothers, speaking through Oosthuizen, denied any involvement in the crypto heist."There is no foundation to the accusation and there's no merit to those accusations," Oosthuizen told <a href="https://www.bbc.com/news/technology-57582805">the BBC</a>. "They maintain that it was a hack, and they were fleeced of these assets."When 20 year-told Ameer Cajee learned of the hack, he told clients not to report the incident to authorities as this would impede attempts to recover the funds. Neither Ameer nor Raees contacted the police after the alleged hack.Oosthuizen defended the brothers' decision to not talk to the police, saying that at just 20 and 18 years old, they "had very little life experience." But several suspicious customers, however, did report the hack. They contacted Hanekom Attorneys, according to <a href="https://www.iol.co.za/business-report/companies/fnb-denies-banking-relationship-with-fraud-accused-crypto-company-cf750449-20fa-4622-9bbe-3ca254973b58" target="_blank" rel="noopener">Independent Online</a>, who then tried to track the brothers down. When unsuccessful, Hawks, a police unit in South Africa that targets crime and corruption, was looped in."We were immediately suspicious as the announcement implored investors not to take legal action," Hanekom Attorneys told <a href="https://www.bloomberg.com/news/articles/2021-06-23/s-african-brothers-vanish-and-so-does-3-6-billion-in-bitcoin?srnd=markets-vp" target="_blank" rel="noopener">Bloomberg</a> over email. "Africrypt employees lost access to the back-end platforms seven days before the alleged hack." The news of the lawyers being terminated from the case also comes as local news site <a href="https://www.moneyweb.co.za/moneyweb-crypto/lightning-strikes-twice-for-africrypts-cajee-brothers/">MoneyWeb</a> reported that this incident wasn't the first time a company the Cajee brothers ran had been hacked. Before founding Africrypt in July 2019, the Cajee brothers ran a different investment platform. In a letter to clients on in May 2019, the brothers said their platform was hacked and emptied of all bitcoin. They blamed a breach of their biggest trading partner, Binance, for the hack.

Lawyers for the South African brothers who vanished with $3.6 billion of bitcoin in possibly the largest-ever crypto heist have been terminated from the case

<ul class="summary-list"><li>Ameer Cajee and his younger brother, Raees Cajee, founded Africrypt in 2019.</li><li>Not long after, the siblings, along with <keyword id="6354947" type="UNKNOWN" weightage="60" keywordseo="bitcoin">bitcoin</keyword> worth $4 billion at the peak in April, are nowhere to be found.</li><li>Authorities and lawyers are still trying to get to the bottom of the disappearance. </li></ul>Two South African brothers recently vanished with $3.6 billion worth of bitcoin in what could potentially be the biggest cryptocurrency heist in history.Local media, including <a href="https://www.iol.co.za/business-report/companies/fnb-denies-banking-relationship-with-fraud-accused-crypto-company-cf750449-20fa-4622-9bbe-3ca254973b58">Independent Online</a> and <a href="https://www.itweb.co.za/content/j5alr7QaVRg7pYQk">ITWeb</a>, were the first to report on the case.In 2019, Ameer Cajee and his younger brother, Raees Cajee, founded crypto investment app Africrypt.Not long after, the siblings, along with 69,000 bitcoins worth roughly $4 billion at their April peak, are nowhere to be found.It all began in April when Ameer, who is the company's chief operating officer, informed their clients that Africrypt was hacked, compromising their accounts, wallets, and nodes.In an unusual step, <a href="https://www.itweb.co.za/content/j5alr7QaVRg7pYQk">20-year-old</a> Ameer told them not to report the incident to authorities as this would impede attempts to recover the funds. A few suspicious customers, however, did report the hack. They contacted Hanekom Attorneys, according to <a href="https://www.iol.co.za/business-report/companies/fnb-denies-banking-relationship-with-fraud-accused-crypto-company-cf750449-20fa-4622-9bbe-3ca254973b58">Independent Online</a>, who then tried to track the brothers down. When unsuccessful, Hawks, a police unit in South Africa that targets crime and corruption, was looped in."We were immediately suspicious as the announcement implored investors not to take legal action," Hanekom Attorneys told <a href="https://www.bloomberg.com/news/articles/2021-06-23/s-african-brothers-vanish-and-so-does-3-6-billion-in-bitcoin?srnd=markets-vp">Bloomberg</a> over email. "Africrypt employees lost access to the back-end platforms seven days before the alleged hack."The lawyers also told cryptocurrency exchanges around the world to sound an alarm if they noticed any suspicious conversion of coins. FNB, which banked Africrypt, has also been questioned about the episode, according to documents seen by <a href="https://www.iol.co.za/business-report/companies/fnb-denies-banking-relationship-with-fraud-accused-crypto-company-cf750449-20fa-4622-9bbe-3ca254973b58">Independent Online</a>. The local bank denied any involvement."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," Nadiah Maharaj, FNB risk spokesperson, told <a href="https://www.iol.co.za/business-report/companies/fnb-denies-banking-relationship-with-fraud-accused-crypto-company-cf750449-20fa-4622-9bbe-3ca254973b58">Independent Online</a>.As the brothers remain missing, some efforts to get to the bottom of things have hit roadblocks.For instance, South Africa's Finance Sector Conduct Authority, the country's financial institutions regulator, said cryptocurrency-related matters do not fall under its jurisdiction, <a href="https://www.iol.co.za/business-report/companies/fnb-denies-banking-relationship-with-fraud-accused-crypto-company-cf750449-20fa-4622-9bbe-3ca254973b58">Independent Online</a> reported.Crimes involving crypto are a growing cause of concern for regulators and companies.Most recently, the Bank for International Settlement <a href="https://markets.businessinsider.com/currencies/news/bitcoin-btc-crime-speculative-asset-climate-energy-use-bis-2021-6-1030546176">criticized the digital asset</a> for its role in illegal activities. "By now, it is clear that <keyword id="2420795" type="PERSON" weightage="60" keywordseo="cryptocurrencies">cryptocurrencies</keyword> are speculative assets rather than money, and in many cases are used to facilitate money laundering, <a href="https://markets.businessinsider.com/currencies/news/ransomware-cryber-attack-bitcoin-btc-cryptocurrency-regulation-sec-2021-5-1030445784?utm_source=markets&amp;utm_medium=ingestgest" target="_blank" rel="noopener">ransomware attacks</a>, and other financial crimes" BIS said.US Treasury Secretary Janet Yellen, meanwhile, has also been a vocal <a href="https://markets.businessinsider.com/currencies/news/janet-yellen-bitcoin-is-an-extremely-inefficient-way-to-transact-2021-2-1030109052?utm_source=markets&amp;utm_medium=ingestgest" target="_blank" rel="noopener">critic of cryptocurrencies</a>."To the extent it is used, I fear it's often for illicit finance," she <a href="https://www.nytdealbookconference.com/dealbookdc2020/827493">said</a> in February. "I do worry about potential losses that investors can suffer."

Two South African brothers have vanished with $3.6 billion of bitcoin in what could be the biggest crypto heist in history

<ul class="summary-list"><li><keyword id="6355117" type="LOCATION" weightage="60" keywordseo="south-africa">South Africa</keyword>'s regulator said it's powerless to act on a suspected $3.6 billion <keyword id="6409096" type="UNKNOWN" weightage="60" keywordseo="Bitcoin-scam">bitcoin scam</keyword>.</li><li>Two brothers who founded <keyword id="11513667" type="UNKNOWN" weightage="60" keywordseo="africrypt">Africrypt</keyword> appear to have gone missing, along with bitcoin worth billions.</li><li>South Africa's FSCA said the company appears to be a Ponzi scheme designed to defraud investors.</li></ul>South Africa's financial services regulator has said it can't take any action over a <a href="https://markets.businessinsider.com/currencies/news/south-african-brothers-billions-bitcoin-disapper-crypto-heist-2021-6-1030548585">suspected scam</a> that lawyers say has caused as much as $3.6 billion worth of <a href="https://markets.businessinsider.com/currencies/btc-usd">bitcoin</a> to go missing.The country's Financial Sector Conduct Authority <a href="https://www.fsca.co.za/News%20Documents/PRESS%20RELEASE_AFRICRYPT%20(PTY)%20LTD_24%20June%202021.pdf">said</a> Thursday that Africrypt, the company linked to the lost holdings, looks like a Ponzi scheme set up to defraud investors.Yet the FSCA said that as cryptocurrencies are not regulated financial products or services in South Africa, it is powerless to do anything in this case."At this stage we have only found evidence of crypto asset transactions," it said in a statement. "Currently crypto assets are not regulated in terms of any financial sector law in South Africa and consequently the FSCA is not in a position to take any regulatory action."Africrypt was created by brothers Ameer and Raees Cajee in 2019, and based in Johannesburg in South Africa.According to a police statement seen by <a href="https://www.bloomberg.com/news/articles/2021-06-23/s-african-brothers-vanish-and-so-does-3-6-billion-in-bitcoin">Bloomberg</a>, the company promised high returns of up to five times principal investments.Yet Hanekom Attorneys, the lawyers for the affected investors, now say that the brothers - and as much as $3.6 billion of bitcoin - have vanished, in what they describe as a "heist". Insider was unable to contact the crypto company, whose website is down. The FSCA said: "This entity was offering exceptionally high and unrealistic returns akin to those offered by unlawful investment schemes commonly known as Ponzi's.""The public is urged to understand that unrealistically high returns suggests that the investment scheme is likely to be fraudulent," it added.Africrypt's apparent closure, and the inability of regulators to deal with it, raises fresh concerns about the safety of cryptocurrency investments around the world.Crypto <keyword id="31671" type="CITY" weightage="100" keywordseo="markets">markets</keyword> are currently largely unregulated. Watchdogs have routinely warned that investors should be prepared to <a href="https://www.businessinsider.com/bitcoin-price-investors-lose-all-their-money-warning-uk-regulator-2021-1">lose all their money</a>.

South African regulator says it's powerless over suspected $3.6 billion bitcoin scam, as crypto is out of its reach

<ul><li><keyword id="6355117" type="LOCATION" weightage="20" keywordseo="south-africa">South Africa</keyword> has faced two of the largest <keyword id="11273930" type="UNKNOWN" weightage="20" keywordseo="crypto-scams">crypto scams</keyword> in the world this year, leading to nearly $4 billion stolen from investors.</li><li>Mirror Trading International made off with $170 million in January, while Africrypt founders allegedly absconded with $3.8 billion in April.</li><li>The country’s regulators are now racing to put in new regulations within the next three to six months — hopefully before another scam hits.</li></ul>South Africa is now locked in a race against time to bring in new regulations to curb the misuse of <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite">cryptocurrencies</a> in the country. So far this year, the country has faced two of the biggest crypto scams in the world, which has wiped off nearly $4 billion of investor wealth. The authorities are looking to have better controls in place before another scam hits investors. Kuben Naidoo, chief executive officer of South Africa's banking regulator known as the Prudential Authority and deputy governor of the South African central bank, told <a href="https://www.bloombergquint.com/global-economics/regulatory-clock-ticks-for-cryptocurrency-assets-in-south-africa">Bloomberg</a> that these new laws will likely be finalised within the next three to six months. South Africa plans to regulate the crypto industry in a phased manner The first move is likely going to be establishing proper know-your-customer (KYC) norms for crypto exchanges and the creation of systems to prevent money laundering, not unlike what <a href="https://www.businessinsider.in/cryptocurrency/news/south-korea-is-open-to-cryptocurrencies-and-making-an-effort-to-regulate-them/articleshow/83986459.cms">South Korea</a> is trying to put in place right now. The second phase will involve coming out with investor-protection guidelines and rules for managing the risk facing banks. “Crypto assets will be brought into the South African regulatory purview in a phased and structured manner,” the Intergovernmental Fintech Working Group said in a <a href="https://www.ifwg.co.za/wp-content/uploads/IFWG_CAR_WG_Position_Paper_on_Crypto_Assets_Press_release.pdf">statement</a> earlier this month. The organisation released a position paper consisting of 25 recommendations and an outline of a possible regulatory framework, which includes the need for better financial literacy for consumers as the retail interest in <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite">digital currency</a> grows. Crypto scams that wiped out $4 billion in South Africa The first scam unfolded in January when a company called Mirror Trading International — which operated as a “crypto trading club” and promised investors 10% returns — <a href="https://www.businessinsider.co.za/fsca-topham-slams-cryptocurrencies-is-crypto-safe-2020-10">reportedly</a> absconded with $170 million. However, this scam pales in comparison to the one flagged in April, when the founders of investment platform Africrypt disappeared with $3.8 billion in Bitcoin, after sending investors an email claiming that the platform had been hacked. This is the biggest known crypto heist in the history of the world so far. Earlier this month, Africrypt’s lawyers <a href="https://www.bloomberg.com/news/articles/2021-06-28/missing-brothers-lawyers-terminated-from-s-africa-bitcoin-case">told</a> Bloomberg that the founders had terminated their contract as well. “Our mandate to assist the Cajee Brothers has been terminated,” the attorney, John Oosthuizen, said when asked about the Raees and Ameer Cajee’s whereabouts. South African authorities are feeling the pressure The Financial Services Conduct Authority (FSCA) is looking to categorise cryptocurrencies as financial products, which would put them under the regulatory body’s purview. While money was lost, the FSCA found itself in a conundrum with respect to the investigation. “At this stage we have only found evidence of <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite">crypto asset</a> transactions. Currently crypto assets are not regulated in terms of any financial sector law in South Africa and consequently the FSCA is not in a position to take any regulatory action,” the FSCA said in a <a href="https://www.fsca.co.za/News%20Documents/PRESS%20RELEASE_AFRICRYPT%20(PTY)%20LTD_24%20June%202021.pdf">statement</a> on June 24. The authority also warned the public of the ‘high-risk nature of investing in crypto assets’ and said it had concerns about the suitability of crypto assets as an asset class because of the ‘underlying business models’ of crypto firms and the ‘risk of large fluctuations in the market price’. Simply put, the FSCA would have its hands tied if another crypto exchange decided to pull the rug out from under investors. However, if cryptocurrencies were classified as financial assets, then the FSCA would be able to investigate them as such. <div type="ExtQuote" text="To protect the public, the Authority is in the process of considering declaring crypto assets as a financial product, which would give the FSCA jurisdiction over these transactions." auname="FSCA statement"></div> The clock is now ticking for South African crypto players as the government mulls over new regulations to bridge the gap. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/cryptocurrency/news/formula-one-strikes-a-100-million-sponsorship-deal-with-a-crypto-exchange-for-five-years/articleshow/84013515.cms">Formula One just struck another crypto deal — this time for a reported $100 million</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/careers/news/digitisation-push-for-small-businesses-could-create-technology-jobs-in-rural-areas/articleshow/84014494.cms">Digitisation push for small businesses could create technology jobs in rural areas, say Business Insider’s MSME Exchange panelists</a>

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Lawyers for the South African brothers who vanished with $3.6 billion of bitcoin in possibly the largest-ever crypto heist have been terminated from the case

Emily Graffeo

Two South African brothers have vanished with $3.6 billion of bitcoin in what could be the biggest crypto heist in history

Isabelle Lee

South African regulator says it's powerless over suspected $3.6 billion bitcoin scam, as crypto is out of its reach

Harry Robertson

South Africa’s $4 billion in crypto scams has regulators scrambling to bring in new regulations within the next three to six months

BI India Bureau

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