Hacked Cryptopia Exchange Appoints Liquidator; Resolution Could Take Months
The exchange reopened with incomplete trading pairs, but now a liquidator may gain control of the assets.
The Cryptopia exchange has appointed a liquidator to go through its asset after the January hack. The market, which reopened with limited trading pairs, angered traders for blocking access to wallets that were not affected by the hack. The liquidators appointed, David Ruscoe and Russell Moore from Grant Thornton New Zealand, will have special oversight and investigation functions.
Users were immediately skeptical of the move, seeing it as a way to transfer the losses to other asset holders. Cryptopia lost access to its Ethereum wallets, as well as thousands of token wallets, with the hacker stealing the only copies of the private keys available.
The appointment of a liquidator means a renewed investigation for Cryptopia, which may take “months, rather than weeks”. One of the liquidators appointed commented:
“We realize 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,” said David Ruscoe.
A preliminary investigation by third parties showed that some Cryptopia tokens were moved and liquidated, with total losses of about $17 million. The liquidator will post a preliminary report next week, through the New Zealand Companies Office site.
The appointment of a liquidator shows that Cryptopia in fact failed to relaunch with full functionalities, and users are worried about another crisis and further losses. Currently, CoinMarketCap shows that no data is available, and lists zero trading volumes, despite the exchange’s earlier announcements that some trading pairs are functioning. The market is still closed for deposits and withdrawals.
The Cryptopia hack coincided with the crash of the QuadrigaCX exchange, which revealed deeper flaws in accounting practices. Exchanges remain the weakest spot in the digital asset world, yet despite the losses, the prices continued to rally in the past months. More recently, Binance admitted to a hack, achieved through the withdrawal of more than 7,000 BTC in a single transaction.