South African cryptocurrency investors may have lost US$3.6 billion in bitcoin after the disappearance of two brothers associated with one of the country's largest crypto exchanges.
Africrypt was founded in 2019 by Durban brothers Ameer and Raees Cajee and had 69,000 bitcoins in April when warning signs first appeared.
That came when chief operating officer Ameer, who at 20 years old was three years older than Raees, wrote to investors stating the company had been hacked and clients' digital wallets had been compromised, forcing it to halt all operations.
"At this point, it is unknown to us the extent of personal client information breached during the attack," he wrote, said Business Technology website ITWeb.co.za.
He asked their clients not to report the hack, saying it would slow down recovery of the funds - but some investors were spooked and hired Hanekom Attorneys to find them after they disappeared.
"We were immediately suspicious as the announcement implored investors not to take legal action," Hanekom Attorneys told Bloomberg.
"Africrypt employees lost access to the back-end platforms seven days before the alleged hack."
Bloomberg is now reporting the Cape Town law firm hasn't been able to track the brothers down and has reported the incident to the Hawks, South Africa's police unit which targets serious crimes like organised crime and corruption.
Other crypto exchanges around the world have been alerted in case there is an attempt to convert the digital money to fiat currency.
This is the second big loss to hit South African cryptocurrency investors in the last two years, with Johann Steynberg, CEO of trading platform Mirror Trading International, disappearing with 23,000 bitcoins.
Data firm Chainalysis called it 2020's biggest global cryptocurrency investment scam, but the US$1.2 billion value has been eclipsed by Africrypt's losses.
This marks another blow to cryptocurrency uptake around the world as both Iran and China continue to crackdown on mining and use of digital money.
The price of bitcoin dipped again this week as an illegal 7000 computer mining farm was shut down by Iranian police and China estimated 90 percent of its mining facilities had been shuttered.
Bitcoin value has also been influenced by billionaire Tesla CEO Elon Musk's negative tweets about the cryptocurrency, which caused hacking group Anonymous to release a video denouncing him.