There May Still be Hope for Funds Lost on Cryptopia and QuadrigaCX Exchanges

The exchanges are hinting at a long process that requires holders state their losses and wait for a reimbursement of their coins or tokens.

Not all may be lost for those that held funds on QuadrigaCX, the now-bankrupt Canadian exchange, and Cryptopia, the New Zealand market operator. The exchanges, which closed in early 2019, are now in a lengthy procedure for bankruptcy, and are seeking former traders’ input to recover at least some of the assets.

While the exchanges suffered losses for very different reasons, now there is a possibility for a procedure to return the funds.

In the case of QuadrigaCX, where it became clear the losses were due to fraud and misuse of funds, there is a claims form open for those that seek redress. The procedure requires that traders supply evidence of having balances on the exchange. The time window for redress is limited, extending until August 31.

Cryptopia, on the other hand, faced a more complex situation. Because some of the exchange’s databases were held with a US-based provider, there was a threat that the insolvency could lead to the deletion of the data. This would wipe out information of the exact user balances at the time of the hack in January 2019.

But Cryptopia managed to receive bankruptcy protection in the US, thus being able to recover its user database from Phoenix. The market operator is also under insolvency protection in New Zealand.

“We have begun and continue the process of recovering certain wallets which were established after the January hack and moving them into a “safe non-hacked environment,” the Cryptopia team stated in the most recent update.

There is also no possibility to reopen Cryptopia with partial balances after the hack, the team stated. While some exchanges have continued to operate even after a hack, Cryptopia believes the renewed activity may lead to new illegal behavior. Any repayment or return of assets will be only possible after a screening KYC procedure and anti money-laundering measures.

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