Cryptopia: new update for account holders
Security

Cryptopia: new update for account holders

By Marco Cavicchioli - 21 Aug 2019

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Grant Thornton has published a new update on the progress made so far, addressed to Cryptopia account holders. 

With the definitive closure of the New Zealand exchange website, Grant Thornton has taken on the role of bankruptcy liquidator. 

In this new update, more than a month after the previous one, the company states that it has made good progress with regard to the security and preservation of cryptocurrency funds belonging to the former owners of the exchange accounts. 

Customer data was stored in a third-party data centre in the US, which included the data needed to accurately calculate the amount of funds held by individual customers at the time the website closed down. 

The process continues with the transfer of funds into a “safe non-hacked environment”. 

Grant Thornton also states that this was necessary due to the fact that the source of the January 2019 hack has not yet been determined. The process of securing the funds had already been initiated by Cryptopia itself before the bankruptcy and is necessary to ensure that the data can no longer be compromised. 

The company also declares that it is continuing to work with the local police and other international authorities to try to find out who was behind the hack. 

However, to date, the process of quantifying client funds is still ongoing. The pace at which they are progressing seems to be getting slower, but the company says the process is more complex than one can imagine. 

In fact, first of all, the clients did not have single wallets, hence it is impossible to determine the precise quantity of funds possessed using only the keys of the wallets themselves. 

Cryptopia kept the details of the quantities owned by each individual customer separately, whereas the tokens were grouped into common wallets. The exchanges between users were in fact recorded on the database of the website, and not on the blockchain. 

Moreover, a “detailed reconciliation process” between the database with all customer data, which also includes data on the exchanges and the quantities of tokens owned by each individual customer, and the cryptocurrency wallets has never been performed. 

Therefore, in order to accurately determine the amount of tokens owned by each customer, it is necessary to undertake a manual process to determine what is found in the wallets, then reconciling the information obtained with that contained in the customer database. 

The latter process is well underway, but will still take time to complete. It involves reconciling the accounts of more than 900,000 customers, many of whom hold multiple cryptocurrencies, with millions of transactions in more than 400 different cryptocurrencies. 

Finally, Cryptopia declares that it is still trying to figure out how to recover the funds that were hacked in January 2019. The situation is defined as “complex” and requires the cooperation of third parties. 

Once the reconciliation process is over, it will be necessary to wait for the decisions of the courts of New Zealand to be able to start returning the funds to customers. The details of the return process, however, are not yet known, especially as there are certain legal requirements and obligations, both in the country and internationally, that must be met, such as those relating to anti-money laundering (AML / KYC). As a matter of fact, even customers who had previously completed the KYC process on Cryptopia will still have to do it again. 

Grant Thornton promises to provide further updates on the matter as soon as more information becomes available. 

Marco Cavicchioli
Marco Cavicchioli

Class 1975, Marco teaches web-technologies and is an online writer specializing in cryptocurrencies. He founded ilBitcoin.news, and his YouTube channel has more than 11 thousand subscribers.

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