Liquidation of hacked cryptocurrency firm Cryptopia heads for $ 15 million


The liquidators of hacked cryptocurrency firm Cryptopia have spent nearly $ 15 million and still have a long way to go.

Christchurch-based Cryptopia ran an international cryptocurrency exchange that was hacked in January 2019 during one of New Zealand’s biggest robberies.

About $ 24 million from the exchange’s $ 250 million cryptocurrency store was transferred to other exchanges after thieves obtained electronic keys for secret wallets.

Shareholders passed a special resolution in May 2019 putting the company into liquidation and appointing David Ruscoe and Malcolm Moore of Grant Thornton as liquidators.

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Since then, the liquidators have billed $ 4.34 million in fees and spent $ 2.7 million in legal fees (both amounts excluding GST) as part of the $ 14,991,000 cost of liquidation up to until November 14, 2021.

Liquidator fees are intended for investigations, attempting to secure pirated assets, development and management of the claims portal, design and oversight of an appropriate identity verification process, oversight from the Cryptopia customer support team, to engaging with experts specializing in crypto-assets and liaising with legal authorities.

Police guarded Cryptopia's premises in Christchurch after a hack in January 2019.

Things

Police guarded Cryptopia’s premises in Christchurch after a hack in January 2019.

Liquidators report good progress in the six months between May and November, saying in their latest report that they have started verifying the identities of claimants from 183 countries.

Almost 80% of the exchange’s users by value had gotten involved in the claims process, they said.

The next step would be acceptance of the application, when applicants would have the option to accept their balances.

Cryptopia staff continued to work in an office building in Colombo St after the cryptocurrency exchange was hacked and approximately $ 24 million in crypto assets were lost.

Staff photographer / Tips

Cryptopia staff continued to work in an office building in Colombo St after the cryptocurrency exchange was hacked and approximately $ 24 million in crypto assets were lost.

Before the currency could be transferred, they would have to go to court to get the distribution model approved, to confirm what should be done with the unclaimed crypto assets, and to set a deadline for receiving and letting it go. assessment of the claims, the liquidators said. .

They continue to work with police and international authorities to determine the source of the January 2019 hack.

The search for the stolen funds is ongoing and recovery actions have been filed in the United States, Malaysia and Singapore.

“For the most part, actions regarding the 2019 hack focused on retrieving information that describes the movement of crypto assets after the hack,” the liquidators said.

Several foreign stock exchanges had frozen the stolen assets.

The liquidators also reported that they received $ 50,000 in legal fees from a third party who refused to return client data published by miscarriage of justice despite orders from the High Court.

The party was fined $ 7,500 after admitting to contempt of court.

A former employee who stole $ 250,000 from the company while he was an employee had repaid the full amount and would be sentenced earlier this year, the liquidators said.

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