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Cryptopia, a cryptocurrency exchange with headquarters in New Zealand, has suspended trading services and released a press statement on May 15 stating that it is in liquidation. The latest development comes less than six months after the exchange lost millions through hacking.
Cryptopia managed to reopen for business after the completion of police investigations. Cryptopia’s management believed that they could overcome the losses and return to profitability.
Liquidators Appointed
David Ruscoe and Russell Moore from New Zealand’s Grant Thornton have been given the task of liquidating the exchange. According to the statement, the two were appointed on May 14.
The exchange says that the liquidation process is in the best interest of “customers, staff, and other stakeholders” despite efforts by the management to minimize costs and set the firm on a path to profitability.
The appointed liquidators are expected to secure the assets in the best interest of all the stakeholders involved. The process will take a considerable amount of time due to the complexities involved.
“Given the complexities involved we expect the investigation to take months rather than weeks,” reads part of the Cryptopia’s statement. The press release also highlighted that the liquidators would be working with other various experts and relevant authorities in fulfilling its duties.
Grant Thornton will soon contact the exchange’s customers and suppliers and inform them about its appointment in the coming days. According to Grant Thornton, an initial report will be published on the New Zealand Company’s website in a week’s time.
Cryptopia was down for hours before the announcement of the liquidation. However, the exchange claimed that it was in maintenance mode, and users need not worry about anything.
“Don’t Panic! We are currently in maintenance. Thank you for your patience, and we apologize for the inconvenience,” the exchange wrote before announcing the liquidation process.
Cryptopia January Hack
Cryptocurrency exchange hacks are slowly becoming a common feature that leaves investors counting their losses. Cryptopia exchange first announced that it had been hacked on Jan. 14. A report released on Jan. 21 by Elementus revealed that the exchange lost $16 million in the hack. The report concluded that the exchange lost access to its private keys.
The hack prompted Binance CEO Chanpeng Zhao (CZ) to urge people to store digital assets on the most secure and most exchanges instead of storing them on their own wallets. At the time, Binance had not suffered any security breaches.
The exchange lost another $180,000 in Ether two weeks later, and this cemented the notion that Cryptopia had lost control of its private keys. Cryptopia suspended all its services as the authorities carried out their investigations.
The exchange was eventually given the green light by the investigating authorities to resume its business. It was later announced that 9.4 percent of the exchange’s holdings were lost in the attack. Cryptocurrency exchanges such as Binance and KuCoin said they would freeze any funds suspected to be proceeds from the hack.