Arabic Arabic Chinese (Simplified) Chinese (Simplified) Dutch Dutch English English French French German German Italian Italian Portuguese Portuguese Russian Russian Spanish Spanish
| (844) 627-8267

Liquidators top $20m in expenses for hacked crypto firm, while customers wait for funds | #hacking | #cybersecurity | #infosec | #comptia | #pentest | #hacker


Christchurch cryptocurrency exchange Cryptopia went bust in 2019 holding large amounts of bitcoin.

Supplied

Christchurch cryptocurrency exchange Cryptopia went bust in 2019 holding large amounts of bitcoin.

Customers of hacked crypto-exchange Cryptopia are still waiting for their funds despite a four-year wait and $20 million already spent by liquidators.

Christchurch-based Cryptopia was put into liquidation by its shareholders in May 2019 after a drop in business in 2018 and a disastrous hack in January 2019 which stole currency then worth about $25-to $30 million, about 15% of all clients’ funds.

The exchange was holding cryptocurrencies worth about $170m and had 800,000 account holders with a positive coin balance.

The liquidators’ – David Ruscoe and Malcolm Moore of Grant Thornton – latest report shows that nearly four years after the liquidation not a single account holder has got their crypto-money back despite the accountancy firm spending $20.3m on the liquidation, including $5.78m on its own fees and $3.4m on legal fees. Unsecured creditors (those with no priority claim) are owed nearly $3m.

READ MORE:
* Liquidation of hacked cryptocurrency firm Cryptopia heading towards $15m
* Assets worth $62,000 allegedly stolen from liquidated company Cryptopia
* Former employee allegedly stole almost $250k worth of cryptocurrency from Cryptopia

Most of the account holders live overseas.

The liquidators’ spending has mainly been funded by converting crypto-assets to mainstream currency ($14.3m) and funds recovered ($5m).

But, according to the report, the end appears to be in sight. The liquidators will apply for court orders in the next few months to get clarity on funds that have not been claimed, the distribution model and setting a cut-off date for claims to be received and assessed.

In December 2021, the liquidators said the court applications would be made in the first half of 2022.

STUFF

Liquidators have locked down Christchurch-based Cryptopia. (Video first published in May 2019)

Since appointment, the liquidators have had to reconstruct the exchange’s infrastructure because the source of the original hack remains unknown and malicious code could still be embedded, the report says.

If you have information to add to this story, email martin.vanbeynen@stuff.co.nz in confidence.

They hired international cybersecurity experts to secure wallets (separate storage devices for each account holder) and transfer assets to a secure environment.

“This has been a complex and lengthy process.”

Administrative failures by Cryptopia meant they had to reconstruct wallets and corroborate transactions to ensure account holders had the correct balance, the liquidators say.

Cryptopia founders Rob Dawson and Adam Clark oversaw a company with administrative failures, liquidators say.

-/Stuff

Cryptopia founders Rob Dawson and Adam Clark oversaw a company with administrative failures, liquidators say.

In the four years since liquidation, the liquidators set up processes for the registration of claims and verifying the account holders’ identities. The latest step involved account holders agreeing with their balances. By the end of November last year, 72 per cent of users contacted had confirmed their balances.

Many cryptocurrency owners who banked at the Cryptopia don’t seem worried about claiming their coin.

“…there remains a material amount of cryptocurrency attributed to account holders who have not yet participated in the claims process or identified themself (sic),” the liquidators’ latest report shows.

“While we have made significant progress on the claims process by value, we still have a large number of unclaimed holdings.”

The liquidators say they continue to work with the New Zealand police and international authorities to find the source of the hack.

Recovery actions had been filed in the United States, Malaysia and Singapore to track the movement of the assets post-hack. They had also asked US law enforcement agencies to lift freezing orders so stolen assets could be returned. So far about $3000 has been repatriated.

An exchange in Singapore had received a number of stolen assets and was co-operating. Legal action in Malaysia had stalled, the report says.

Ruscoe could not be reached.

——————————————————–


Click Here For The Original Story From This Source.

National Cyber Security

FREE
VIEW