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South Africa crypto exchange brothers vanish after $3.6 bn disappears from platform.

Lawyers for investors in a cryptocurrency exchange in South Africa say $3.6 billion has vanished from the site and that the two brothers who controlled it can't be found. The exchange alerted clients in April that their accounts had been hacked.

If true, Africrypt's losses would be among the most significant in crypto history. According to crypto intelligence firm CipherTrace, losses in the crypto business due to fraud and other crime were $1.9 billion in 2020, down from a high of $4.5 billion in 2019.

In a letter to clients dated April 13, Africrypt COO Ameer Cajee stated that client accounts had all been compromised owing to a recent system breach. Africrypt had ceased operations, according to the letter, and had "begun the process of seeking to restore stolen funds."

It didn't say how much money had gone missing, but cautioned clients that engaging lawyers to get their money back would "only postpone the recovery process."

In a statement to Reuters, Hanekom Attorneys, a law company hired by some of those who claim to have lost money, said their investigations had shown a total of $3.6 billion had vanished from Africrypt. A request for information on how the company arrived at that figure was not immediately returned.

Africrypt could not be reached for comment by Reuters. Cajee's cellphone went to voicemail, and he didn't answer to SMS messages. The website for the exchanges is currently unavailable.

Cajee and his brother and co-founder Raess had been untraceable since the April 13 letter, according to Darren Hanekom, a lawyer representing the investors, and he had brought the case to South Africa's specialist anti-corruption police, known as the Hawks, on April 16.

On April 14, Bitcoin hit a new high of about $65,000.

The Hawks' spokeswoman, Philani Nkwalase, said they had been unable to launch the case thus far because Hanekom Attorneys is situated in the Western Cape, while those requesting money are in other provinces.

"We advised those individuals to please open cases where they're at "He said over the phone. "Go to the police station closest to you."

Cajee's cousin, Zakira Laher, told Reuters that the brothers had been missing since April and that she was an Africrypt director until she departed in 2019.

"I speak for the entire family when I say that we have no idea where they are," she said over the phone. "They abruptly ceased communicating with us in the middle of April. Our WhatsApp messages are not being responded to."

Hanekom said he had told many other crypto exchanges about the matter and that his company had notified South Africa's Financial Sector Conduct Authority (FSCA) earlier this month, but that the FSCA could not intervene because it does not regulate cryptocurrencies.

In response to concerns regarding Africrypt, the FSCA's head of enforcement, Gerhard van Deventer, told Reuters that crypto currency is not defined as a financial product, and that the FSCA does not have jurisdiction to investigate."We're working on bringing cryptocurrency into the regulatory fold," he stated.