Cryptopia Exchange Closes Indefinitely as Liquidation Investigation Starts
After a brief period with limited functionality, Cryptopia once again froze its wallets and is undergoing an investigation and liquidation procedure.
The Cryptopia exchange closed once again, with a message replacing the trading website, posted this Wednesday. This time, the lockup of wallets and trading is indefinite, with no timeline for reopening while a liquidation investigation lasts.
The Cryptopia lockup followed a brief period where the exchange opened Bitcoin (BTC) and Litecoin (LTC) wallets for withdrawal. But other wallets remained locked, despite not being affected by the hack. The move angered the digital asset community, for losing assets that were not stolen, and for generating doubts that Cryptopia had no plans to return the funds.
Additionally, the exchange was a point of access for relatively obscure digital assets with lively communities. Projects like Linda (LINDA) and Electroneum (ETN) were widely affected. The Linda team even issued a statement urging for patience, without promising asset recovery:
As an alternative to the Cryptopia listings, NEXT Exchange suggested it may add the assets that were formerly represented on the New Zealand exchange:
The decision to close down the exchange and hand over control of funds to a liquidator also generated accusations of a form for an exit scam. Cryptopia was in the process of moving funds to safe wallets and the expectations were that the market would at least allow users to take their funds off the exchange.
The even worse offense was that Cryptopia had, in fact, opened deposits and encouraged users to send funds to the new addresses, without allowing withdrawals. This caused even larger direct losses in comparison to the hack, which took away an unknown sum much larger compared to the hack.
The liquidation procedure and long-term investigation were somewhat unexpected, and followed the decision of Cryptopia to enter maintenance on April 26. The prevalent worries are that Cryptopia would never relaunch.
At the same time, the Binance exchange once again proved its reputation by completing its maintenance in a timely manner, while adding a 50,000 BNB bonus for large-scale traders.