Oct 19, 2021

Mawazo Writing Africa

Writing about the main

Durban brothers vanish amid R51bn cryptocurrency scam

According to this amazing Bloomberg story , a little-publicized Durban-based company called Africrypt, run by two barely 20-year-old brothers, Raees and Ameer, Cajee, apparently closed after it was allegedly “hacked” sometime in April this year.

The thing is, the cryptocurrency platform seems to be using digital funds worth up to 3, 6 billion coins in his coffers, so Bloomberg. At yesterday’s exchange rate that was an unbelievable 51.27 billion ZAR.

This figure seems almost fantastic to say the least – it is, for example, only 5 billion ZAR less than the total market value of the Woolworths Group. < / p>

Almost immediately, the doubters gathered on social media. For one thing, Africrypt is far from a household name, nor does it have what you would call a “presence” in the local crypto scene.

According to a market source, there is “general consensus”. that the number is not only excessive, but rather massively overestimated. ”

Large, well-known crypto projects, the source told Financial Mail, are generally more than 1 billion) – but the participants in the Industry know who the actors in these projects are.

Koshiek Karan, founder of Banker X, spoke bluntly about it on Twitter. “Africrypt claimed to have grown from a one-man operation to one of the largest and most successful AI trading companies in Africa. Have you ever heard of them? Nobody has. This is the start of any great scam. ”

His thread on this story is entertaining, but it has a great lesson:“ Whether it’s forex, crypto, stocks, commodities … if someone < i> ever tells you that they figured out a magical pattern to consistently beat the market based on classified technology … just remember – they make with you, not < i> for you. “

In other words, if there is no product, then you are the product.

Given the frequency Of these types of crypto-catastrophes, one can somehow understand the aversion of central banks and other authorities to cryptocurrencies – not least because they represent everything that is not under central monetary control. And when the scammers get started, the numbers can be huge and there is no recourse.

According to this article In the Financial Times (FT), the central banks intensify their criticism of cryptocurrencies, “as the battle for the monetary system is escalating”.

They argue that “digital tokens like Bitcoin” have only a few redeeming functions and work against the public good. “

The FT says:” The Bank for International Settlements (BIS), the global body of central banks, has also rejected stablecoins – a link between crypto and conventional assets – a ” Appendage “of traditional money. The strongly worded report was the clearest signal so far from central banks that they are ready to fight any efforts to undermine their key role in the global financial system. ”

The BIS says that“ the central banks are at the center ” . a rapid transformation of the financial sector and the payment system. Innovations such as cryptocurrencies, stablecoins and the walled garden ecosystems from Big Techs all work against the common good that underpins the payment system. ”

However, as the FT emphasizes, the BIS supports the development of cryptocurrencies that are created by Central banks themselves are supported.

You can only imagine how that goes down with the crypto crowd. When it comes to Africrypt’s customers, they would surely sleep a lot better now if the Reserve Bank had been behind them.

Financial News