By Chris VallanceTechnology Reporter
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A lawyer for two brothers who founded a South African Bitcoin investment firm has told the BBC they categorically deny any involvement in a “heist”.
Africrypt, founded by Raees and Ameer Cajee, “absconded” with Bitcoin then valued at about £2.6bn ($3.6bn), according to a complaint to police.
A law firm – Hanekom Attorneys – made the complaint in April on behalf of a group of investors.
But there is uncertainty over exactly how much crypto-currency is missing.
On its now inactive website, Africrypt described itself as “an investment firm exclusively focused on crypto-currency and blockchain technology”.
The company, founded in 2019, told investors in only a few years it had grown from a one-man operation running out of a bedroom to “one of Africa’s largest and most successful AI trading companies”.
On 13 April, chief operating officer Ameer Cajee wrote to Africrypt clients announcing the firm had halted operations because of a hack.
“Our system, client accounts, client wallets and nodes were all compromised,” he wrote.
The letter advised investors not to pursue the “legal route” as that would “only delay the recovery process”.
Some of the investors who lost access to their money are represented by law firm Hanekom Attorneys.
The law firm said Bitcoin valued at $3.6bn had been “dissipated in its entirety”, in a complaint sent to an elite South African police unit, known as the Hawks.
The investigation into where the bitcoins went had been hampered by the use of “various dark web tumblers and mixers”, the law firm wrote.
That refers to technologies that can make it harder to trace bitcoins.
The law firm said its analysis led it to believe that describing this as a hack was “misplaced”.
Lawyer John Oosthuizen, who represents Raees and Ameer Cajee, told the BBC the brothers “categorically denied” they had been involved in a “heist” or had absconded with funds.
“There is no foundation to the accusation and there’s no merit to those accusations,” he said.
“They maintain that it was a hack, and they were fleeced of these assets,” he added.
He declined to confirm the $3.6bn value for the Bitcoin lost, and noted media reports suggesting the value was an overestimate.
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Asked by the BBC if the brothers had contacted the police after the alleged hack, Mr Oosthuizen said: “No.”
But he added that they were young men aged 18 and 20 with “very little life experience”.
He said the brothers had received death threats and their first reaction was to keep themselves and their families safe.
He said 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.
He said Raees and Ameer Cajee would co-operate with any future inquiries by the authorities.
But at present they had not been notified of any investigation.
Questions have been raised about amount of Bitcoin Africrypt is said to have held.
An investor who spoke to the BBC on condition of anonymity argued that while the losses were considerable they were very much less than the billions that had been reported.
An archive of Africrypt’s website from Jan 2021 also suggests it was holding less than $3.6bn in assets: “We manage over $100m across our venture fund and AI-driven trading platform,” it read.
The Financial Sector Conduct Authority (FSCA) said, in a press release, that crypto-assets are not regulated in South Africa “and consequently the FSCA is not in a position to take any regulatory action”.
The press release said Africrypt, “was offering exceptionally high and unrealistic returns”.
The BBC has asked South African police if an investigation is under way but they have not yet responded.