Cryptocurrency: Our hands are tied over $3.6bn Bitcoin investors’ loss ─S’African Regulators

*As lawyers report that investors could lose Bitcoin worth billions of Dollars, South African regulators also urge the investing public to understand that unrealistically high returns suggests that the investment scheme is likely to be fraudulent

Isola Moses | ConsumerConnect

For the fact that cryptocurrency transactions are not yet a regulated product in the country, South Africa’s financial regulators say that their hands are tied in the recent alleged $3.6billion Bitcoin fraud at Africrypt exchange.

While the regulatory agency contended that the investment platform that went awry looks like a ‘Ponzi scheme, the Financial Sector Conduct Authority (FSCA) said all it could do is review complaints because “crypto assets are not regulated in terms of any financial sector law in South Africa, and consequently, the FSCA is not in a position to take any regulatory action.”

ConsumerConnect had reported that one of the highest ranking-ever crypto heists in the world involved a pair of South African brothers who reportedly vanished, along with Bitcoin worth 51bllion Rand ($3.6billion) from their cryptocurrency investment platform in the Southern African country.

In compounding the crypto investors’ woe, a law firm based in Cape Town, South Africa, hired by the shareholders also declared that they could not locate the fleeing brothers.

The legal firm stated it reported the matter to the Hawks, an elite unit of the national police force in the Southern African country.

The FSCA regulators in a statement Thursday, June 24, 2021, that “this entity (Africrypt) was offering exceptionally high and unrealistic returns akin to those offered by unlawful investment schemes commonly known as Ponzi’s.

“The public is urged to understand that unrealistically high returns suggests that the investment scheme is likely to be fraudulent.”

Johannesburg-based Africrypt had launched in 2019 and was run by South African brothers Ameer and Raees Cajee.

They promised a minimum return of five times the amount invested, according to a police statement by one investor seen by Bloomberg. In the end, he invested close to 1.8 million rand ($126,000), the FSCA statement said.

In the same vein, lawyers acting on behalf of a group of clients or Bitcoin investors said that the brothers and Bitcoin worth as much as $3.6 billion had gone missing.

The regulators added: “The authority is concerned over the large number of scams being perpetrated by persons purporting to provide the crypto asset to the public.

“The public must be aware of the very large number of unscrupulous players in this sector.”

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