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Lightning strikes twice for Africrypt’s Cajee brothers

This is not the first time their crypto schemes have been ‘hacked’.
A former client thinks the brothers waited for a hack to happen in 2019 and used that as an excuse to tell investors their crypto had disappeared. Image: AdobeStock

It seems lightning does strike twice for Raees and Ameer Cajee – the two brothers behind Africrypt which was supposedly hacked and whose wallets were emptied of more than R50 billion in cryptos in April.

The Cajee brothers disappeared after the alleged hack, similar to the disappearing act performed by Johann Steynberg, one of the masterminds behind the Mirror Trading International (MTI) bitcoin scam that was placed in provisional liquidation in December 2020. MTI was a multi-level marketing scheme that managed to pull in an estimated 23 000 bitcoin (more than R10 billion at current prices).

Moneyweb has been contacted by ‘clients’ of the Cajee brothers with a familiar story.

Even before Africrypt was born in July 2019, the Cajee brothers had another investment scheme going – also hacked and emptied of all bitcoin, this time in May 2019.

“I was introduced to the Cajees back in 2019 when Raees was probably still in matric. They had supposedly developed a way to make around 10% a month trading bitcoin. Raees, as young as he was, talked a good game. I gave them quite a bit of money in bitcoin and asked them to trade it on my behalf. I was getting monthly statements over the next five or six months showing that my account had nearly doubled,” says Joe Smith (not his real name).

The Cajees’ playbook

Smith was asked to sign an agreement that exonerated the company from virtually any kind of loss, including hacks.

This is similar to the agreement with Hong Kong-based RaeCreateWealth Limited that clients of Africrypt were required to sign.

Another ‘client’ of the Cajees told Moneyweb they were prominent members of the Muslim community in Johannesburg and exploited the trust of friends and family.

“We were introduced to the Cajee brothers through friends; we could see, through the lifestyle that they were living, that [they] had money. We never suspected that [they] would steal a few hundred thousand rand. The crypto market was crashing at the time, but Raees was sending me statements every month showing me positive growth.”

Then, in May 2019, came the dreadful news of a hack.

Raees wrote to clients:

Good evening, as some of you may have already heard Binance Exchange has been hacked in the past 20 hours, unfortunately Binance is our biggest trading partner and our API (Application Programming Interface) keys have been suspended along with deposits and withdrawals for at least the next week. Binance has not given us any insight into the extent of the damage but they will honor all Bitcoins stolen in the hack. Our Hong Kong servers were compromised through the Binance API and our cyber forensics team is still investigating the incident, updates will follow in the coming days due to our large systems architecture.

We are desperately working to get back online and migrate completely to Huobi Exchange where we will be trade exclusively.

RCW will not be able to facilitate any withdrawals for the next week, we sincerely apologize for any inconvenience caused but please be rest assured we are doing everything we can.

Please understand events like these are out of the companies control completely and are impossible to prevent in this regard as we have to depend on Binance to protect our API keys.

The hack referred to was widely reported at the time, and about $40 million was reckoned to have been lost.

Another ‘hack’, another letter …

The letter sent to Smith and other clients in August 2019 was remarkably similar to the one sent to Africrypt clients in April this year, which read:

Dear Client,

We regret to inform you that due to the recent breach in our system, client accounts, client wallets and nodes were all compromised. At this point it is unknown to us the extent of personal client information breached during the attack.

Unfortunately, this has forced Africrypt to halt operations. We have begun the process of attempting to retrieve stolen funds and compromised information. Our number one priority is retrieving the funds as speedily as possible, however, this process is very wary and will take a substantial amount of time to complete, if successful. Furthermore, we have begun a full system audit to determine the extent of the breach.

We urge all clients to please be patient as we attempt to resolve the situation at hand. It is understandable that clients may proceed the legal route, but we ask clients to please acknowledge that this will only delay the recovery process.

Clients will be kept updated on progress made in the recovery process and with any information regarding the parties involved in orchestrating the attack on our systems.

“I think what happened was they waited for a hack to happen [in 2019] and then used that as an excuse to tell us that our crypto had disappeared,” says a former ‘client’ who asked not to be named.

International law enforcement agencies are starting to take an in-depth look at Africrypt and what may turn out to be the biggest crypto hack in history.

Denials

The Cajees, talking through their lawyer John Oosthuizen, denied any involvement in the “heist”.

“There is no foundation to the accusation and there’s no merit to those accusations,” Oosthuizen is reported as saying, according to the BBC.

The Cajees also apparently dispute the purported size of the hack – $3.6 billion – though just one address (of several) that was hacked had a balance of more than 71 000 bitcoin, worth about $2.4 billion.

Moneyweb understands the Cajees sold a Lamborghini, a Ferrari and two properties days before they bolted.

There are conflicting reports as to their whereabouts, with London and Dubai being the most likely locations. United Arab Emirates and SA have just concluded an extradition treaty to fast-track the extradition of the Gupta brothers to SA to face corruption charges related to state capture.

Says Darren Hanekom, of Hanekom Attorneys, who has investigated the hack on behalf of several clients: “We believe, and we now have more evidence to suggest, that the Cajees were acting on behalf of a much bigger international syndicate.

“It is very unlikely that they managed to rope in more than R50 billion from investors,” says Hanekom.

“This was a money laundering operation.”

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COMMENTS   39

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Shame. The dog ate my homework. I have been hacked. Excuses, excuses. But never admit that your greed also played a role for the situation you are in.

Where are all these people that invested the R 54 Billion with Africrypto?

Does anyone hear about them? this one probably wiped out a few thousand people from the big three cities in South Africa.

Surely before you invest with someone, you do some research first? and if it looks like some small office block somewhere then that should raise lots of alarm bells?

Again, if it walks and sounds like a duck then it probably is a duck.

Quite right Chris

If i can’t feel it, taste it or see it, i don’t want it.. Prefer tangible assets that only i control..As far as possible

I live by my credo

“A fool and his money are soon parted” So many have been taken! I feel for them but sadly many crypto investors believe in a rich quick scheme

Greed is the foundation of speculative investments, and mostly ends in tears.

The holy trinity of getting scammed ..greed, arrogance and dumbness!

It is quite interesting how naive “investors” trust their statements. People tend to believe anything that appears in black and white on a piece of paper. It never dawns on Ponzi scheme investors that the statements themselves are fraudulent. It is similar to the investor dreaming about some stellar monthly profit, writing it down on a piece of toilet paper and mailing it to himself. In effect, this is exactly what happens. The operator of the Ponzi scheme tells investors what they want to hear. He knows precisely what level of yield will impress his ignorant clients. Therefore, the clients, and not the trading bot, determines the reported yield of the scheme.

The Ponzi scheme will implode on the very first day if the first client took the trouble to ask his auditor to verify the authenticity and trustworthiness of the statement. The rules of the JSE require independent parties to verify the value of accounts and to draw up statements. The fund manager cannot issue proof of his own work.

I honestly have no sympathy with investors if they care so little about their money if they are not even willing to make the small effort to verify the validity of statements.

A wealthy man once told me never put anyone between you and your money if you can help it. Some times we have too, but verify them first.

Clever man!!

I trust no person. I do trust regulations to a certain extent. Therefore, I only trust people who are regulated and who can prove that they do comply with the relevant regulations.

Even then I don’t transfer money into the account of another individual or business. I will transfer money into my own account at a regulated broker, bank, and fund manager. I will not even transfer money into the account of a regulated hedge fund, because, even though hedge funds are heavily regulated, the funds are pooled and my money is not in a segregated account under my name where I have 100% discretion to withdraw money at any time. I have seen too many hedge funds blow up, and the first thing they do is place a moratorium on withdrawals.

A pessimist is an optimist with experience.

Physical gold and silver are the only money with no counterparty risk. I would recommend everyone keep some in their possession. Maybe 1-5% of your net worth.

“was asked to sign an agreement that exonerated the company from virtually any kind of loss, including hacks”

with reference to the above – that says it all – it is like writing off or giving away your “investment money” never to be seen again – no guarantee, no nothing as insurance for at least just the capital amount “invested”.
was it just deposited in a 32day notice / money market bank account at least it would have generated interest income
sorry for any naive person who blindy “invested” his pension money in and now have to explain to his / her partner that it was a 100% lost

stick to it: when it is too good to be true, then it is not true

I have invested in the JSE and other vehicles for the last 45 years. I have tried very hard to study and understand cryto. I am not a genius by any manner of means nor am I a moron, but I have never got my head around it.

Told my kids too, if you don’t understand it walk away even if the returns sound fantastic.

As for these two skelms…….

Sage advice pwgg and absolutely correct. Hope younger readers pick up on this. I have followed the same strategy forever and it has served me well too (the only problem is the older I get the less I understand of some things. I still don’t understand derivatives for instance).

I also avoided like the plague anyone who wore a Rolex.

I thought it was just me not being able to understand things lately.

Maybe it is best, life is less complicated…..

Especially those massive chunky Rolex’s, the copies.

I also never look back and regret an “investment” oppurtunity. You know the ones the guys talk about at the golf club, about how well they did. Maybe they did, maybe they did not, I have been conservative with where I put my money, the returns were maybe lower than some, but I spend conservatively and I am where I am. Comfortable, not mega rich, but I regard myself as wealthy, not materialisticly but mentally wealthy. I have passed that onto my kids, the meaning of wealth. That is the ability to look after and grow your nett worth.

also derivatives and CFD’s.

“I also avoided like the plague anyone who wore a Rolex.”

Ha ha, Boepens, that is also some sage psychological advice! And not just restricted to only the unhinged, psycho-owners of “Rolex’s”, but also many other luxury “name brands”.

A naked derivative or CFD is the same as applying for a bond to buy a house. A covered derivative is like taking out insurance on your car. You get exposure and gear at a much lower cost. Therefore, these financial instruments offer a very cheap and convenient way to bankrupt yourself. That is why more than 85% of traders who use gearing lose all their money within 12 months. It is a zero-sum game, however. One man’s loss is another man’s profit. This is why less than 1% of traders are spectacularly successful.

No one understands crypto – it’s all ‘black box’ hidden technology only controlled by a few mega-masterminds who live in Batcaves and levitate to work i.e its all techno-BS. A tulip to them all

But the sales man was wearing a Rolex and gel in his hair……..

pwgg, same here, hours and hours of thought, and the only explanation I can come up with is that this is a very cheap and ingenious way to have every last Blockchain algorithm created and owned for onward sale! These algorithms are obviously in high demand and are going to be going forward, and until it is figured out how to “recycle” them! But in the meantime one would have needed huge capital outlays for the massive computer hardware farms and power generation to create them, so why not get volunteers hyped up to mine them, paying them in a pseudo currency, that has cost you nothing to create! The cost to “manufacture” these algorithm’s is nothing, despite what Bitcoins market cap is. The algorithm is the value, not the currency, the way I see it! Please shoot some holes in my thinking before I shoot myself at this wasted opportunity that I am trying to ignore buying!:)

Snowy, Don’t know. Blockchain can be replicated by ANYBODY. If Blockchain was a patented technology which could’ve been sold off to other parties and or have license fees for it – yes sure, then you have a business and an investable asset. Blockchain as it currently stand is not investable as an asset or technology, as anybody can create it and use it. Companies that will use blockchain in the future versus companies that don’t, maybe that will be a differentiator why you would invest in certain companies and not. But Blockchain as a single technology and Crypto on top of that are not investable items. Speculation and Gambling are better words to use when putting your money in or behind these!

Snowy can’t help you sorry this is way over my paygrade.

‘a way to make around 10% a month trading bitcoin’ should have been the first warning sign!!

“skelms …” There couldn’t be a more appropriate South African description!

do yourself a favour and look-up Warren Buffet’s views on Crypto on YouTube. You’ll love it!

thanks my Lord. Good link .. I enjoyed watching the Oracle of Omaha say the way it is. Charlie Munger is a treat. Well worth watching for sure.

‘Some people are really stupid’ – George Carlin

“Think of how stupid the average person is, and realize half of them are stupider than that.” ….. George Carlin

Is anyone interested in finding out where these bozos are and getting a conviction? That would be the first thing I would do if I had been duped to the tune of R50b lol, I suspect they’re in Dubai with the Zuptas together with all the money stolen from taxpayers converted into Bitcoin and then”hacked”. This little schemei is so transparent it’s embarrassing!

So call investors could be funding terrorists, unknowingly?

‘ It is a huge challenge to find a good cryptocurrency trader. 90% of them lose 90% of their money in 90 days’ – quote from review platform.

Not your keys, not your cheeze

1st day: you “invest” R100
2nd day: You are old your R100 has grown to R110
3rd day: You are told your money is lost.

Question: How much did you loose?

The answer above will tell you whether people did loose that much money as reported in this story.

Looks like these thieves took more than the Zuptas, and planned to do so all along.

Another Bitcoin Ponzi scheme. Greed is real.

“Says Darren Hanekom, of Hanekom Attorneys, “We believe, and we now have more evidence to suggest, that the Cajees were acting on behalf of a much bigger international syndicate”

‘International;? Was this not a sluice gate created in SA for the billions that have been stolen in SA? People who have worked hard to make money are not stupid and are very cautious as to where they invest their money.

The schemes all differ but they always have to buy a LAMBO

HI Ciaran,
I heard a podcast where you interviewed Richard de Sousa of Altcoin tried emailing Altcoin , my email bounced back , tried telephoning them nobody answers the phone. tried emailing them via another email address they said they would contact me , still waiting very suspicious

End of comments.

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