Crypto Scams Evolve—Cajee Brothers Make Off with a Record 69k BTC
Two South African brothers have been lost to sight since their crypto exchange platform “Africrypt” was allegedly hacked. However, it turns out that the alleged hackers were the two brothers themselves—Ameer Cajee and Raees Cajee. Reportedly, the duo managed to get away with 69,000 Bitcoin, worth more than $4 billion during the Bitcoin peak in mid-April.
Africrypt Could Have Only Deceived the Noobs
As the price of cryptocurrencies continues to soar to levels one could not have even dreamed of, so too do the online scams connected with this industry. A recent report from CBS News claims that crypto scams have soared 1,000% since late last year. That is why caution is an inseparable part of any crypto discussion.
Bearing these in mind, every investor should be extra watchful while investing in a crypto-related business. Part of the caution would be to avoid brand-new, unsubstantiated businesses — specifically the ones that have a 20 years-old with five distinctions in matric as its CEO.
Fundamentally, there are several bold deficiencies with Africrypt that should have mostly limited its victims to newbies and inexperienced users of the crypto space. First off, on its About page, the company claims that it has evolved from a one-man operation running out of a bedroom to “one of Africa’s largest and most successful AI trading companies in only a few years.”
While it is not impossible to grow from a one-man operation to one of the most successful companies, a claim like this leaves behind distinct footprints. Prior to this, Africrypt was barely in the news, if any. Furthermore, the company was not even regulated under FAIS — an unregulated but Africa’s most successful AI trading company?
In addition, what makes someone really skeptical is that the firm asked investors not to report the hack to authorities, implying that it would only slow down the recovery process. Everyone in crypto knows that once a transaction is processed, there is no recovery process.
Crypto and Scams
Through the course of crypto history, there have been a handful of scams that truly shook the world. On top of the list sits a scam that was attributed to as “one of the biggest scams in history” by The Times: the OneCoin Ponzi scheme.
As a cryptocurrency that challenged bitcoin, OneCoin was founded in 2015 by Dr. Ruja Ignatova. With a Ph.D. in European private law, high profile, intelligence, knowledge, and a broad network, Ignatova appeared to be anything but a fraudster.
However, in October 2017, after OneCoin accumulated around €15 billion, Dr. Ruja vanished. The interesting yet surprising element of this scam which lasted for almost five years is that the project never had a blockchain. Basically, this scam succeeded because, at that time, only a few people knew about cryptocurrency and blockchain. All people knew was cryptocurrencies are a “get rich quick” method.
Another striking scam in crypto history is PlusToken. The project, which started in April 2018, offered guaranteed monthly payments to users of its cryptocurrency wallet. In short, the team behind PlusToken managed to deceive investors into handing more than 180,000 BTC, 6,400,000 ETH, 111,000 USDT, and more — worth more than $4 billion in 2019.
How PlusToken managed to hoodwink investors back in 2019 is very similar to what Africrypt did this year in 2021: a magic pattern that delivers guaranteed returns. While some legit companies do offer such services, it is crucial to keep in mind that their returns are not sky-high and that they have a product. When there is no product, investors are the product.
A more modern type of crypto scam is the fake Elon Musk Bitcoin and Dogecoin giveaways. While these scams are so lucid, a remarkable percentage of investors still fall victim to them. According to a recent report, the fake Elon Musk giveaway scams have reaped at least $2 million from cryptocurrency investors.
How to Stay Away From Scams
The crypto world is largely unregulated and mostly untraceable, this makes this industry an attractive choice for scammers from all over the world. However, it is not impossible to avoid being scammed even while trying to enjoy all the potentials of this emerging market.
Scammers are always striving to discover new, creative ways to trick investors, though their principle is the same: they ask for money and promise more in return. A general rule that can always help you avoid a scam is to stay away from new, unsubstantiated crypto-related businesses. There are plenty of established and regulated crypto firms, why not choose them?
Finally, with decentralized finance, everyone has the freedom to hold their money (crypto) wherever they want. Naturally, this brings with it some degree of responsibility — requiring people to do extensive research and only investing what they can afford to lose.
If you had faced the “Africrypt” crypto exchange, would have you invested in it? Tell us why or why not in the comments below.