Africrypt turns sour on investors: Founders flee as court cases build up

Two South African brothers are facing mounting pressure to come forward to authorities as investigators delve into one of the biggest cryptocurrency thefts in the country.

Raees and Ameer Cajee are central figures in the now infamous Africrypt cryptocurrency investment scheme saga. Local investors have been left in the dark and out of pocket following what the Cajee brothers claimed was a hacking incident that saw the company’s cryptocurrency holdings stolen.

The brothers headed up the purported investment firm which promised lucrative returns on investments, as per its 2020 investment presentation. Clients could either make South African rand or Bitcoin (BTC) deposits to Africrypt, which then managed those investments.

Things fell apart in April 2021 after Raees Cajee informed investors through a letter that hackers had allegedly stolen an unconfirmed amount of its holdings. Shortly after the Cajees had pleaded with clients not to opt for legal proceedings, the Africrypt website went offline.

There are conflicting reports around the actual value of cryptocurrency that was managed by Africrypt — but a June 2021 report by the Wall Street Journal quoted the eldest brother’s estimate that Africrypt was managing around $200 million worth of cryptocurrency at the height of the market’s 2021 boom.

Investors have sought legal counsel in order to wrestle back their funds from Africrypt, while financial regulators have been hamstrung by current regulations of cryptocurrencies in South Africa, which leaves the space out of their jurisdiction.

It’s important to note that the Africrypt saga is not the first time that the Cajee brothers’ businesses have fallen prey to alleged hacking incidents. Back in 2019, RaeCreate Wealth, which is incorporated in Hong Kong and ran by Cajees’ informed investors, had some of its cryptocurrency stolen during a Binance hack. It is unclear whether investors were ever reimbursed for their losses as the Cajees registered Africrypt in the same year, according to the company’s registration documentation verified by Cointelegraph.

The Cajee brothers disappear

The exact whereabouts of the Cajee brothers are still unknown, and the pair have previously claimed their flight from South Africa was necessitated by subsequent threats from a number of disgruntled clients that have banded together to seek legal recourse.

Local company Badaspex (Pty) Ltd. is spearheading its own legal effort to recoup funds invested in Africrypt. The company launched an application on April 19, seeking for Africrypt to be liquidated following the scheme’s claims that it had lost investors’ holdings.

Cointelegraph contacted Johannesburg-based attorney Gerhard Botha who is representing Badaspex, as well as other investors that lost funds to Africrypt. Botha confirmed that Badaspex is looking to recover $2.4 million (35 million rands) invested in Africrypt, a figure that has not accounted for the appreciation in value of the BTC that was entrusted to the Cajee brothers’ firm. The attorney is representing a total of 105 investors, whose lost investments amount to what he described as a “conservative” $8 million (115 million rands).

The attorney also refuted the Cajees’ claim in the WSJ in June that Badaspex’s director Juan Meyer, a figure once linked to locally convicted Czech gangster Radovan Krejcir, had threatened them after Africrypt shuttered.

Meyer’s attorney said his client had tried to meet with one of the brothers at a hotel in Johannesburg to discuss Africrypt’s closure. After agreeing to meet, Meyer was left waiting at reception for about 15 minutes before the hotel’s security requested him to vacate the premises. Botha told Cointelegraph that the version of events put forward by the Cajees was “opportunistic,” given that the incident was clearly set out in the court-order application: