South African Brothers allegedly stole $3.6B worth Of Bitcoin from “Africrypt” investors

In as much as blockchain technology is supposed to be meant for deploying good services, whenever there are cases of bad actors, they should be caught and prosecuted for their bad acts within the crypto space.

The blockchain and crypto space is assumed to experience large-scale fraud and theft of unsuspecting user funds on a frequent basis. This would continue except the users of such platforms take up some level of responsibility to avoid such recurring activities by potential scammers and thieves.

There are conscious efforts by major blockchain companies and crypto exchanges to create an alliance for policing and regulating the on-chain transfer of funds from their exchanges to other exchanges or platforms to protect user funds.

This has been observed in the past few years when major crypto exchanges were hacked and funds were stolen. However such funds that were stolen were blacklisted such that wherever they appear in a transfer they would not be processed until those thieves were eventually brought to book. 

These regulations which came in the form of Know your customer (KYC) in centralized exchanges had been very useful for tracking transactions by crypto experts and detectives in the blockchain space to help fight such criminals who seem to be damaging the potential goals of the use of cryptocurrencies.

How did two South African brothers steal over $3.6B of Bitcoin from investors?

It still remains a prerequisite for anyone who intends to move into any form of investment to first and foremost get themselves educated on the type of investment they intend to venture into. 

In the light of the 2020 and early 2021 crypto bull market, the herd (masses) simply listen to the news on traditional media and most times try to take advantage of possible opportunities without knowing in detail what they are venturing into. 

This is the case of the majority of investors who were eventually scammed by two South African brothers who created a crypto investment business and successfully convinced investors from South Africa to participate in their scheme where they were purportedly expected to make large returns on their investment.

How was the scam perpetrated?

The brothers were able to create a crypto platform and used a notable bank in South Africa as their domiciled financial institution for receiving the said funds. Their platform was designed in such a way that they were able to hold custody of the investors’ digital assets and promised a huge return on their investment over specific periods of time

At the beginning of the business, they were able to pay a few investors who eventually became their mouthpieces for advertising the company to other unsuspecting investors who never carried out any due diligence about the investment.

As expected of any so-called rug pull scheme, the project closed its business after reporting a possible attack or hacking of its platform. A statement for Africrypt investors read: “We regret to inform you that due to the recent breach in our system, client accounts, client wallets, and nodes were all compromised..”.

Most times, before this is done, the team would have made suspicious withdrawals from the pool of funds belonging to the investors and as such make it difficult for the investors to make withdrawals. 

As in the case of the “Africrypt” brothers, they made the employees unable to access the back-end platforms days before the alleged hack and were not able to view or access client balances during the period in question. 

This also gave them enough time to move the funds from the priority wallet to another wallet as proven from the on-chain analysis of the transactions before it eventually landed in a crypto wallet in the United Kingdom.

However, until now, the South African brothers are yet to be found and the investors’ funds have also not been returned to them. 

What are the takeaways from this crypto heist?

In conclusion, the Klever team would like to encourage users and potential investors to ensure they get themselves educated on the use of crypto.

Klever always ensures good and useful content is posted on our various platforms to help guide our users and customers alike in a Klever way.

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