The AfriCrypt Crypto Scam in Light of Kenya’s Cybercrimes Act

In Kenya, the Cajee brothers would have been charged with fraudulent use of electronic data, false publication of data, and unauthorized interference of computer system programs. Consequently, they would have been facing jail time or their assets would have been confiscated if purchased by use of the proceeds gained from their exchange service.

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Two brothers, also famously referred to as the Cajee brothers, were accused of vanishing with $3.6 billion of investments from their currency exchange service in Johannesburg known as AfriCrypt. The heist is reported to have begun in April 2021 when there was a surge in price of Bitcoin, which consequently led to the brothers’ disappearance.

Ameer Cajee, the elder brother and Chief Operating Officer, informed the users of the exchange service that the company was facing a hack. He then requested the clients and lawyers not to report the situation to the authorities as this would slow the recovery of the lost funds. 

However, some skeptical investors decided to take further action by hiring a Cape Town firm that forwarded the matter to the Hawks, a specialized unit of the national police force. The questionable request of imploring the investors to not report to the authorities made the brothers’ actions suspicious, and further investigation revealed that the employees of the company had lost access to the exchange platforms a week before the alleged hack. 

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SEE ALSOSouth African Crypto Investment Firm, AfriCrypt, Reportedly Defrauds Over $3.6 Billion from Investors

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Their lawyer stated that there was proof of the hack, emphasizing that the brothers had fallen victim to theft and that the brothers would answer any inquiries from the authorities. The attorney handling the case on behalf of the investors shared with the press that the funds had been subjected to several dark web mixers which made the funds virtually untraceable.

The Financial Sector Conduct Authority of South Africa was also involved in the investigations surrounding AfriCrypt, stating that it was not in a position to take any regulatory action since cryptocurrency is not regulated under any financial sector law in South Africa. 

The prosecution’s progress may have been inhibited by the decision made by several investors to transfer their claims to Pennython Project Management, a Dubai-based firm, that offered some kind of payout to the affected users. It is also said that an anonymous investor offered to put in money towards the exchange for a 51% stake of the platform service on the condition that the plaintiffs drop all charges against the brothers. 

In Kenya, the Computer Misuse and Cybercrimes Act serves the purpose of protecting confidentiality, integrity, and availability of computer systems as well as easing prevention, detection, investigation, and prosecution of Cyber Crimes.

Some of the key provisions mentioned in the Act include:

  • Offences such as unauthorized interference of computer systems data
  • Fraudulent use of electronic data
  • Issuance of false e-instructions

among others.

The Act also requires that the service providers assist in the investigation, and stipulates hard penalties for going against the given provisions.

The Cajee brothers, as such, would have been charged with fraudulent use of electronic data, false publication of data, and unauthorized interference of computer system programs. Consequently, they would have been facing jail time or their assets would have been confiscated if purchased by use of the proceeds gained from their exchange service.

The cryptocurrency market within the African continent is growing steadily, and it being decentralized and unregulated, attracts scammers who try swindling money out of their investors.

Efforts are ongoing to bring crypto into the supervisory fold in several African countries to curb such criminal activities without stifling the innovations in the industry.

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RECOMMENDED READING: Understanding Preservation Orders – A Look at the 102 Million Kenya Shillings Crypto Saga from a Legal Perspective

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