Cryptocurrency News

NZ’s hacked cryptocurrency exchange goes into liquidation

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The New-Zealand’s hacked cryptocurrency exchange, Cryptopia went into liquidation process and has suspended any trading activities.

Badly hit in the mid of January this year, the cryptocurrency exchange incurred a heavy loss of irrecoverable $16 million. Now yesterday, the exchange’s assigned liquidator firm, Grant Thornton New Zealand made an announcement not to send any deposits to the exchange:

We realise Cryptopia’s customers will want to have this matter resolved as soon as possible. We will conduct a thorough investigation, working with several different stakeholders including management and shareholders, to find the solution that is in the best interests of customers and stakeholders.

In financial terms, liquidation is the process for exchange to cease the process of trading and distribute the assets to the holders. This incident occurs when a business is insolvent where the investors’ assets are due. Based on the claims of the shareholders or investors, the company or exchange is obligated to pay their money back.

Yesterday, hacked cryptocurrency exchange went under maintenance without announcing on the social media which brought attention of a Redditor:

I woke up this morning to check Cryptopia to see if there was any updates on the website about new trading pairs. When I went to Cryptopia mainsite, it says:

“Don’t Panic!

We are currently in maintenance.

Thank you for your patience and we apologise for the inconvenience.”

https://www.cryptopia.co.nz/ – Has there been any unofficial (or maybe official) word anywhere on what happened? I can’t find anything on the twitter or discord

This January, the New Zealand exchange went offline for few days followed by the unfortunate event that left the firm half-dead. The security breach included the hack of Ethereum and ERC-20 tokens as per a blockchain data analysis firm. The hacked cryptocurrency exchange anyhow, restarted the trading operations in March, however had several banking issues.

According to the company’s assigned liquidator, Grant Thornton:

The hack had a “severe” impact on the company’s trade, and despite the management’s efforts to reduce cost and return the business to profitability, it was decided that liquidation was the best path forward for all stakeholders. While this process and investigations take place, trading on the exchange is suspended, adding that the complex investigation will take “months rather than weeks.

Following the news, Cryptopia’s twitter account flooded with customers showing their frustration that they were unable to withdraw funds ever since the hack happened. Some of them even commented the incident as exit scamming and claimed to take legal actions against the exchange. The liquidator firm will file an initial report by next week on the Cryptopia’s official website.

 

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