At the same time, Bitcoin was reaching its all-time high price, two brothers made the biggest crypto heist in history. Yes, today I will talk about Africrypt. What is it all about? How did they get away with it and, of course, what are the implications for the crypto world?
What is Africrypt?
Africrypt. A crypto investment firm, founded in 2019 in South Africa by two young brothers, notorious for its murky advertisement. For example, Africrypt was allegedly providing ‘AI-based trading’ with as much as 10% monthly returns. Looks like a Ponzi scheme, doesn’t it? But it worked.
Until April 2021. The elder brother, Raees Cajee, 21, sent Africrypt’s investors an email, claiming that the company’s servers were hacked by Ukrainians. However, he begged not to start the legal investigation, saying it would slow down the recovery of ‘stolen’ crypto assets. Immediately after, the Cajee brothers disappeared, later telling the Wall Street Journal that they received death threats after the ‘hack’ and had to protect their family.
Despite the brothers’ rejection of all accusations of the heist, it seems that Africrypt was indeed a scam project. The firm’s transactions were traced to reveal that before the so-called ‘hack’ Africrypt gradually withdrew its balance using dark web mixers and tumblers for money-laundering. Next, Africrypt employees were restricted from accessing the company’s backend mechanisms a week before the infamous email. Finally, it has emerged that the duo bought Vanuatu’s citizenship in 2020.
How Does Vanuatu Citizenship Work?
Vanuatu, a country in the southwestern Pacific Ocean, offers a ‘citizenship-by-investment’ scheme. For 130 000 USD (and without being physically present in the country), anyone may become a proud citizen of Vanuatu. Anyone, including bad actors, North Korean officials, and our crypto brothers. What for? To legally change their names and achieve visa-free access to the UK and the eurozone. Vanuatu doesn’t perform pedantic security checks – the country is one of the world’s poorest, and these ‘golden passports’ constitute 42% of the government’s revenue.
How will it Affect the Crypto World?
Such widely covered media crypto scandals have a devastating impact on the future of cryptocurrencies. It took Bitcoin a long way to stop being associated with fraudulent schemes, the dark web, and the Silk Road. The last thing we all want is to resurrect the association. What a grim irony – the Vanuatu government confirmed that “it is possible to make payment in bitcoin for citizenship.”
In this regard, it’s good that the Africrypt story has caught the attention of financial regulators, who ‘intend to regulate crypto assets by regulating the crypto asset service providers.’ Who knows, what could have happened if such schemes were legally pursued. But the screws won’t be tightened too much for the crypto community? Share your thoughts below!