Topic: [2019-06-03] Cryptopia Files For US Bankruptcy Protection (Read 173 times)

These guys have been trading for such a long time it is a joke for them not to be prepared for such an event. Do they not know what cold storage is!?

As what we are seeing now, Crytopia (or the people behind this exchange) is inept and is definitely not prepared to deal with a problem of this magnitude. Compared to what Binance lost, Cryptopia should have been able to deal with the blows if they laid down protection and insurance measures years before. Now, it has no choice but to file bankruptcy and be under the receivership to liquidate its assets left. Just another wasted cryptocurrency exchange with a  lot of members. Let's hope that other exchanges are learning the big lessons of the Cryptopia debacle.

https://www.21cryptos.com/cryptopia-files-for-us-bankruptcy-protection/

New Zealand based cryptocurrency exchange, Cryptopia, which became the first alleged major hack victim of the year, as reported earlier, has now filed for US Bankruptcy Protection. Cryptopia’s assigned liquidator firm, Grant Thornton, in an announcement on Monday, said that on 24 May a petition had been filed by them on behalf of Cryptopia in a Bankruptcy Court in the Southern District of New York.

Recent Developments

The petition sought the recognition of New Zealand liquidation in the USA. Further steps were taken for the preservation of data belonging to the hacked crypto exchange stored and hosted on servers with a business based in Arizona.

In response, an order was issued by a bankruptcy court in the Southern District of New York, on 24 May, granting Cryptopia temporary relief until 7 June.

Background: The Hack

Cryptopia, an exchange whose users exceeded a million, nearing to 1.5 million reportedly, was hacked on 14 January 2019, in what became the first biggest security breach of the year. It was estimated that the value of the cryptocurrencies stolen during the attack ranged anywhere between $3 million to $16 million. The attacks reportedly continued for two weeks after the first security breach took place.

The Liquidation

It was announced previously this month on 15 May that Cryptopia has gone into liquidation, the obvious implications of which were a suspension of trading operations. Grant Thornton, stated that the hack had brought lasting damage to the company and despite all efforts by management to restore business successfully, liquidation seemed to be the only resort.

After initiating the bankruptcy protection request, Grant Thornton maintains that the process of recovering data is a slow one and would take time:

“We expect that the process of recovering data and determining how to make distributions to account holders will take some months at least.”