Alapt

Cryptocurrency news

Cryptopia exchange liquidator was able to recover $7.2 million of the $16 million stolen by hackers

Cryptopia exchange liquidator was able to recover $7.2 million of the $16 million stolen by hackers

The exchange’s liquidator Grant Thornton New Zealand has published a report detailing the balance of recovered assets and the challenges the firm faces.

Overall, from may to November, the company received $10.9 million in new revenue, including $5 million from a third-party trust Fund, $4.4 million converted from the exchange’s 344 BTC, and $200,000 from the sale of assets-furniture and equipment from The cryptopia office.

However, expenses related to the ongoing liquidation process totaled $3.7 million, including payments to first-line creditors, salaries, legal expenses, and liquidator commissions. Thus there is $7 164 835 million in assets that can potentially be used to compensate users.

Despite the fact that the process of paying compensation to users is reported to be “in full swing”, the report also highlights the complexity of operations that need to be performed to determine the amount of payments to each user.

“We are working on reconciling the accounts of more than 900,000 active customers, many of whom own several crypto assets, verifying millions of transactions and 900 different crypto assets,” says Grant Thornton.

As the company notes, it is extremely difficult to determine the balance of each asset that cryptopia customers owned, since customers did not have individual wallets, and crypto assets were instead stored in shared wallets, as reported
this summer:

“While Cryptopia stored information about client assets and reported it to the exchange, the crypto assets themselves were stored in shared wallets. Since this is a centralized exchange, clients ‘ transactions took place in the internal register of the exchange without confirmation in the blockchain.”

In addition, the exchange has not completed the reconciliation of its client databases with cryptocurrencies that are actually in its wallets, leaving “time-consuming work” to find out the balance of each client.

Also, a potential obstacle to possible payments was the fact that legal issues must first be resolved. The liquidator appealed to the Supreme court of new Zealand for clarification of the legal status of crypto assets in The country.

As Grant Thornton notes, the court’s decision on whether crypto assets are considered property or not will determine whether they can be managed by proxy or whether the company retains pre-emptive ownership. The next mandatory report of the liquidator must be submitted by may 2020. The company also plans to release an updated version of the report after a court hearing in February.

The process of liquidation of the cryptopia exchange was started
in may and soon after, the exchange filed
application for protection from prosecution by creditors under the bankruptcy law in the United States. According to the Elementus study, Cryptopia lost its data as a result of the hack.
$16 million.