Hacked Cryptopia Gets One Step Closer to Returning Funds

Accounting firm Grant Thornton, the liquidator of now-defunct, New Zealand-based cryptocurrency exchange Cryptopia, announced today that it expects to open the claims registration process by the end of 2020.

As Decrypt reported, Cryptopia lost NZD $30 million ($17.85 million) worth of cryptocurrency due to a hack and went into the process of liquidation in May 2019. Its account holders have recently scored a big win in court, giving them priority over Cryptopia’s creditors when it comes to returning their lost crypto. And now they’re one step closer to getting hold of any remaining money.

“The expectation is the claims process will open by the end of the year with the [anti-money laundering process] to follow this. Once these two phases are complete, we expect the repatriation process to follow,” the company wrote in an update for account holders.

To do this, the firm has prepared a procedure for claiming assets by former clients of the exchange. The latter will need to verify their accounts and other data on a specialized portal. Until this process is completed, Grant Thornton will not be able to proceed with disbursements.

“We cannot re-open the exchange to return account holders’ coins. The exchange was hacked and the source of the hack is still unknown and is still being investigated by the New Zealand Police,” the firm added.

Because of the hack, the liquidator had re-secured all of the coins in “a non-hacked environment” prior to undertaking the reconciliation process, Grant Thornton noted.

Crypto exchange Cryptopia users get big win in court

Account holders who lost money as a result of last year's Cryptopia exchange just won a battle for the remaining funds held by the now-defunct exchange. The New Zealand-based exchange went into liquidation in May 2019 following the theft of NZD $30 million ($17.85 million) worth of cryptocurrency. Bitcoin exchange Mt. Gox’s latest update sets out plan ahead Shortly after the hack, asset recovery firm Grant Thornton was appointed as liquidators for Cryptopia's assets, and recently sold off the ex...

Grant Thornton added that to get their assets back, all Cryptopia’s account holders will have to undertake a know-your-customer procedure—even if they had already done so prior to the hack—since it is a legal requirement in New Zealand.

Additionally, even users whose crypto was not affected by the hack won’t be able to “just withdraw them.”

“Because no detailed reconciliation process between the customer database and the crypto assets held in the exchange’s wallets was ever undertaken, we cannot confirm that account holders' coin balances will match the actual holdings for each coin,” the firm explained.

The liquidator also assured account holders that the process is currently being funded with company assets and “allocation of costs of returning account holders assets will be subject to further direction from the Court.”

Accounting firm recovers Cryptopia records to help return funds to victims

People who had funds on collapsed crypto exchange Cryptopia are now more likely to get back roughly what they had on the exchange. In January, hackers stole 9.4% of New Zealand-based exchange Cryptopia’s holdings, worth $16 million. But while the remaining money stayed in the exchange’s control—it lost its records showing how much each customers held on the exchange. That meant there was apparently no way to determine how much each person could get refunded. Cryptopia hired the New Zealand-based...

It still remains unclear who was behind the theft or how they pulled it off. However, Cryptopia founder Adam Clark previously said that he suspects an inside job—and that, perhaps, it wasn’t even about the money.

“A hacker somehow knew where everything was. Someone walked in with all the keys and deleted the logs on the way out," Adam told Stuff, adding "They didn't take the untraceable currency. It wasn't about spending the money, it was about fucking the company. They had direct access."

But at least for account holders, there will be some repatriation.