The published report provided an overview of the events that have occurred in recent months. In particular, the guaranteed and unguaranteed creditors are listed, with Coca Cola and Dell New Zealand cited in the guaranteed creditors and 69 other creditors included in the unguaranteed with a claim due of approximately $2.44 million.
The announcement of the report’s release has also been posted on Twitter.
— Cryptopia Exchange (@Cryptopia_NZ) May 31, 2019
The market crash of 2018 sinks Cryptopia
The liquidation report states that the exchange, which had more than 2.2 million registered users worldwide, resized its business in early 2018 mainly due to the sharp rise in the price of bitcoins and other cryptocurrencies.
Because of this, the exchange entered into a large number of long-term contracts, including high-cost agreements to provide the entire infrastructure necessary for trading by its customers.
With the market crash of 2018, the company was hit by the significant drop in trading volume. This, in turn, has led the company to reduce its expenses in an effort to minimize trade losses.
This proved to be a double-edged sword as it led to a security breach that resulted in a significant loss of more than $16 million dollars in cryptocurrencies.
An investigation into the case by the New Zealand police was subsequently opened and is still ongoing.
“The company then decided to reopen the exchange for the trade of certain crypto-assets in March 2019 and continued to trade through the date of Liquidation. However, trade volumes were insufficient for the Company to meet its debts as they fell due and it was decided the appointment of liquidators was in the best interest […]”
Customer verification has not yet taken place
With an order of the 29th of May, Cryptopia was granted to convert the bitcoin held in the company’s wallet into fiat currency to finance the liquidation process.
However, the report revealed that the exchange has yet to initiate the audit and verification process of its customers.
The liquidators in charge have not yet even obtained access to the database necessary to finance the platform’s customers.