Two Bitcoin traders have gone missing, along with £ 2,59 billion worth of cryptocurrency (quotation BTC), which was on their investment website. South African brothers, Raees and Ameer Cajee, created the Africrypt cryptocurrency investment platform in 2019.
A real or fictitious hack?
But in April, when Bitcoin's price soared to an all-time high, Ameer, the company's chief operating officer, emailed investors telling them the company had been hacked.
Mr. Cajee asked Africrypt's customers not to report the problem, arguing that this would harm the company's recovery from the alleged hack.
But the investors challenged him and reached out to Cape Town law firm Hanekom, who are cryptocurrency experts. According to the New York Post, the company's lawyers have now warned South African police and cryptocurrency exchanges about the problem.
Africrypt staff lost access to back-end platforms seven days before the alleged hack, the law firm says. Hanekom said Africrypt's funds have been moved from their own and client accounts.
They were then mixed with other Bitcoin transactions to hide what was really going on. The Cajee brothers have apparently gone missing and their social media profiles appear to have been removed.
The South African financial regulator is also investigating, but said his hands are tied because cryptocurrencies are not regulated in the country.
About 20 investors won an interim liquidation order against the brothers after they went to a judge in South Africa. The Cajee brothers have until July 19 to challenge the order.
Many scammed customers
Last week the Mirror reported how a retired teacher was scammed out of her £ 120.000 life savings after falling victim to a Bitcoin scam on Instagram.
Teresa Jackson was tricked into giving up her money. The retiree spotted the bogus Bitcoin investment scheme - which claimed it was approved by survival expert Bear Grylls - advertised on social media.
The popularity of Bitcoin has spawned many "imitators" and there are now more than 4.000 cryptocurrencies. Some of the largest by market cap include Ethereum, Lightcoin, and Tether.
Cryptocurrency is not regulated in the UK, unlike most other financial products. The Financial Conduct Authority (FCA) watchdog monitors cryptocurrencies, but only to prevent money laundering or terrorist financing.
This means that if you put money into something that has to do with cryptocurrencies and lose it, you will probably never see it again. Many other financial arrangements are regulated by the FCA which means your money is protected up to £ 85.000 if the company goes bankrupt or your money is stolen in some way.