Topic: CRYPTOPIA SHUTTING DOWN: Investor losses (Read 1115 times)

COMPANIES IN RECEIVERSHIP AND LIQUIDATION
Update for Cryptopia account holders 18 September 2020
18 Sep 2020
Since the release of our Third report in June 2020, we have made further progress in the Liquidation and provide an update with an additional set of frequently asked questions.

Our main focus has been working to continue the development of a claims process that achieves the following objectives:

Process    Details
Claims registration   1. Allows the registration of account holders details and to make claims for their account balances
AML/CFT verification   2. Verifies account holders' identities to the necessary AML/CFT standard
Asset transfer   3. Instigates asset transfers to account holders

We expect the claims registration process to be open by the end of the year.

Our next statutory report is due for release December 2020 but we will update stakeholders further in the lead up to the launch of the claims process prior to this.

Frequently Asked Questions:
How do I get my coins back?
As outlined above once we have finalised the claims process the Liquidators will be in touch with coin holders via official channels around registering their claim. Coin holders will need to verify their account and identity through an online claims portal. Until the claims process has been completed the Liquidators cannot begin the repatriation process. Coins will only be returned to those who complete all of the above processes.

When can I get my coins back?
The expectation is the claims process will open by the end of the year with the AML to follow this. Once these two phases are complete, we expect the repatriation process to follow. It is important to note that:

We have to establish a claims process and cannot just open up the Cryptopia exchange: the exchange was hacked prior to the liquidation. With the source of the hack still not identified we cannot open up an exchange that has been compromised
We have to complete the reconciliation process: this includes re-establishing coins in a non-hacked environment and then reconciling coin balances to the customer database. With over 900,000 active customers and up to 900 different coins, this is not a quick process
We will likely need to go back to court to seek further directions in respect of the distribution process including AML requirements. As liquidators, we need to follow the laws in New Zealand and cannot just return coins to account holders without completing appropriate KYC procedures
Do I need to register my claim?
You will need to register your claim, however, at this point, we are not ready to receive account holder claims. We have recently agreed on a claims portal which we hope to launch by the end of 2020. We will advise account holders via registered Cryptopia email and our official channels when we are ready to receive account holder claims.

What does the Court decision mean?
The Court decision means that Cryptocurrency is ‘property’ and coins were held on express trust by Cryptopia. A separate trust exists for each type of cryptocurrency and they are beneficially owned by the account holders so will not form part of the pool of assets available to unsecured creditors.

The next steps now will be completing the reconciliation process to determine total customer holdings and finalising a distribution model for returning coins to beneficial owners. This process is being completed alongside the claims and KYC process mentioned above.

The Court has ruled that you are holding my coins, I demand that you return these to me immediately.
Whilst the Court ruling confirms that Cryptocurrencies were held on express trust, the process of returning these coins cannot begin immediately due to the incomplete reconciliation process, AML concerns, and various other legal guidance needed on numerous matters. The Liquidator has a duty to all beneficiaries of these trusts and so repatriation cannot begin until the reconciliation process is complete and the Liquidators are ready for claims from all beneficiaries.

Are you selling my coins to fund the Liquidation?
The Liquidation is currently being funded with company assets. Allocation of costs of returning account holders assets will be subject to further direction from the Court.

To clarify the account holders’ assets are not recorded in the Receipts and Payments statement, found in the Liquidator’s reports.

Will the return of my coins be in crypto or fiat?
The Court’s directions indicate repatriation of customer holdings is to be in crypto where possible. We will work through this and seek further directions as required.

Will KYC be needed?
The KYC process cannot be avoided, as it is a legal requirement in New Zealand. Before returning crypto-assets we will correspond with customers within this claims process. Please note, customers who have previously completed the KYC process with Cryptopia will still need to go through the process set by us.

Why have you not replied to my email?
There were over 960,000 active account holders of Cryptopia. We cannot reply to individual email queries due to the sheer number of emails we receive and the time it would take to reply to all account holders’ queries. Please refer to the Grant Thornton New Zealand and Cryptopia websites and their respective social media channels for updates.

Can you tell me my account balance or provide a transaction report for taxation purposes?
At this stage, we are not able to confirm the underlying transactions or trade history that make up customer balances and therefore cannot communicate account balances to account holders at this time.

Can anyone else tell me my account balance?
We are the only ones with access to the customer database at the date of Liquidation. No one outside of the Liquidators has access to the customer database, nor should they be communicating any information about balances to account holders.

Anyone outside of the official communication channels pertaining to have access to this information or offering to tell account holders what balances are in their accounts is doing so without the Liquidators authority. Please be wary of any such approaches and note that any communications relating to the Liquidation will come from the official channels such as the Grant Thornton website, or the Grant Thornton and Cryptopia twitter accounts.

Will Cryptopia ask me for further funds?
No, we will not ask you to deposit any further crypto-assets or confirm account holders' details at this stage. The only direct point of contact will be made via the email address you used when you registered on the Cryptopia exchange.

Please take care to ensure that any communications asking you to deposit further funds are not scams.

Why can’t you simply re-open the exchange and allow account holders to withdraw their coins?
We cannot re-open the exchange to return account holders’ coins. The exchange was hacked and the source of the hack is still unknown and is still being investigated by the New Zealand Police. Because of the hack, we have had to re-secure all of the coins in a non-hacked environment prior to undertaking the reconciliation process (which had never been completed before). This is not a quick process but is necessary to ensure that coins are secure and that a further hack does not occur.

Because no detailed reconciliation process between the customer database and the crypto assets held in the exchange’s wallets was ever undertaken, we cannot confirm that account holders' coin balances will match the actual holdings for each coin.

Will trading on Cryptopia resume?
No. The Company is in Liquidation so will not be re-opening for trading. Please do not deposit any funds into historic deposit addresses.

My crypto was not affected by the January hack, why can’t I withdraw them?
Because no detailed reconciliation process between the customer database and the crypto assets held in the exchange’s wallets was ever undertaken, we cannot confirm that account holders' coin balances will match the actual holdings for each coin.

New communication about Cryptopia

Will we be entitled to our respective legal forks (BCH-BSV-BTT.....) maybe yes maybe no?

Check https://www.grantthornton.co.nz/Update-for-Cryptopia-account-holders-18-September-2020/

I guess they were trying to save the business,  they were hoping to see if some users will get back on again and continue trading after all what had happened. Of course its not that simple now that we've seen them vulnerable. Investors were given time to withdraw when they reopened, those who deposited took the risks. I doubt if there were many of them though.

I think it is difficult to be able to replace a new nicehash because it requires a lot of capital and they also think of missing funds from traders so maybe they better close and choose not to continue the platform.

You might be not be thinking.
You are hope / wish -ing.

HeXXX himself has published claims that his business partners likely 'set up' the hack as to cover their outright theft of funds.

You might be right but just because professional liquidators are appointed (or imposed) does not mean a scam did not take place.

I somehow don't think Cryptopia exit scammed. I believe they got hacked and are following due process subsequently. They have appointed professional liquidators to take charge.

I somehow don't think Cryptopia exit scammed. I believe they got hacked and are following due process subsequently. They have appointed professional liquidators to take charge.

Cryptopia was one of my favorite exchanges though when I started in crypto. It has a decent volume and can pump many altcoins when there is a good news or announcement with any coin. But I guess the fact they don't become a huge thing and succeed like Binance is the signal that they won't last long and make an exit scam as like the ordinary exchanges do. It's funny to see that there are still complaining who still wants to retrieve their shitcoins from there.

Exactly no more updates from them, better I did not store coins in their exchange. I’ve heard many had lost their funds on this exchange. Never store coins in an exchange that is not secured.

Cryptopia was one of my favorite exchanges though when I started in crypto. It has a decent volume and can pump many altcoins when there is a good news or announcement with any coin. But I guess the fact they don't become a huge thing and succeed like Binance is the signal that they won't last long and make an exit scam as like the ordinary exchanges do. It's funny to see that there are still complaining who still wants to retrieve their shitcoins from there.

Good thing I decided pulling out my funds from cryptopia last year before the incident happened. Luckily, after a month when my funds was withdrawn sudden hacking was badly occuring on that exchange site. It's been always advice by many expert that entrusting our crypto on exchanges isn't a safe idea, so why bother putting our asset despite of unsafe conditions.

It is not really safe to put deposit our coins in a certain exchanges and stay at them for long.  What happen to cryptopia is somewhat a king if scam exit. They gain trust before and build a good market trend, that is why people never expecting this to happen with them.  But all the sudden it goes like this, it is really a big dumb.

Users will not learn their lesson as you put it because any exchange can start the process of scamming at any point.

It is all about a matter of sending your crypto to exchanges for trading only, then for them to be withdrawn immediately. It is essential never to leave crypto on exchanges.

Well i would say not too surprise to see this happening to be honest, never like that exchange the few times i had to use it because of some alts i need to dispose the experience was far from okey, the exchange freezes and hangs at will, not to mention it was serve as a home for pumps and dumps, i feel for those who will suffer as a result of this mess, another lesson to be learnt especially for those who still keep their coins on exchanges.

I have read some articles saying that Cryptopia is borrowing money from banks of more than $ 2 million to pay debt to investors who have deposited a lot of money there.
Investors have been safe and crytopia has filed and declared bankruptcy.

This is very disappointing news on cryptopia, no one ever expected this to happen since this exchange site gained reputations for their good track record on trading crypto. However, the incident took hard time to be resolved yet their investors find it frustrating seeking hope to recover their funds specially those promising tokens and coins they hold for so long.

I do hope admins of cryptopia will fix this serious issues behind them, and people will get back their asset.

Any exchange at any time can go bust and take your coins/tokens with them.

Golden rule: only keep coins/tokens on exchange when you want to trade or keep those on exchanges that you can cover losses for if they steal from you

Very disappointing, cryptopia will not provide compensation for capital holders.
it seems that the funds will be a loss to investors and traders.

Well, actually traders don't have many choices, lots of coins which in my opinion are quite good and convincing in Cryptopia, unfortunately at the same time pump & dump activities in the exchange still seem to be allowed, maybe the reason is that traders keep away and the rest have to lose because their assets are still there.

Up to this moment, cryptopia is still not functioning. I hope it will still be reopened and will still run because I really believed in what happened to them so I hope when they reopened they are now more secure.

I agree, crypto should only be on exchanges when ready to trade otherwise they should be on desktop wallets.

It is never advisable to store crypto holdings in exchanges for a long time. However, it cannot simply be avoided for a good deal of crypto holdings to stay in exchange wallets because it is being actively traded there. It is a huge waste of fees if funds are going inside and out of the exchange every time a nice trade call is made. That is not practical. That is the reason why I have funds left in cryptopia. I just hope they will expedite the entire settlement process.

Very disappointing, cryptopia will not provide compensation for capital holders.
it seems that the funds will be a loss to investors and traders.

I think you should not place your funds in the exchange for a long-time. Because exchanges are still more vulnerable to this kind of thing and also vulnerable to hackers. Better place them somewhere safer like a wallet instead of exchange sites.

Well i would say not too surprise to see this happening to be honest, never like that exchange the few times i had to use it because of some alts i need to dispose the experience was far from okey, the exchange freezes and hangs at will, not to mention it was serve as a home for pumps and dumps, i feel for those who will suffer as a result of this mess, another lesson to be learnt especially for those who still keep their coins on exchanges.

If there is not enough funds to go around they will be unable to return all the funds to all investors. Unfortunately some investors will never get back all of their funds.

I am still waiting for official news about why Cryptopia failed and what the owners tried to do to save it.

They must return all the coins of the users, there must be a clear liquidation even if there’s no regulations because for sure Cryptopia is just closing their exchange and make a new one since they know the opportunuties in the market. I doubt that they will totally leave the market easily, we should watch out for this.

I read the news published on May 31 and I don't know that I almost didn't believe it would happen. Is there no other way to reduce the loss of traders and holders who still keep their coins in cryptopia. Is this the same as time consuming mtgox long enough to solve these problems

How the cryptocurrency community has not found a way to insure itself against these kind of exchanges with tendency to cause harm and loss baffles me but then it goes a long way to show that this market is still very tender and hopefully, ills will be corrected in the future

I think you should not place your funds in the exchange for a long-time. Because exchanges are still more vulnerable to this kind of thing and also vulnerable to hackers. Better place them somewhere safer like a wallet instead of exchange sites.

This is where I believe that SEC or some regulatory body should come in play to prevent and protect this sort of ugly incidence which will put investors in heart ache. Even if an exchange wants to fold up, then someone should fall with it as well as insurance fees

You will not be safe even if you keep your funds in your wallet, because sooner or later you will still have to transfer your tokens to the cryptocurrency exchange. It is possible that at this moment there will be problems with this exchange. Of course, if you keep the funds on your personal wallet most of the time, then you are less likely to lose them.

I think if the exchange is shutting down several times, this will result in losing customer trust. because some customers must have felt a loss, because the assets are restrained, can not get a profit. if it is reopened, I think it is likely that there will be a transfer of assets to another exchange.

That is a valid point. As it was mentioned by another user here, the only time your coins should be on an exchange are when you want to trade. At any other time they should be on your personal wallets.

Such an occurrence from cryptopia is a perfect example of not to keep your coin on an exchange,  because of a susceptible hacking,  I hope they will be able to refund investors if not all but at least they should make a provision for that

if indeed Cryptopia is re-opened, and the trade returns to good work, investors may not experience a loss, but if the Exchanger's condition does not recover, investors will lose a lot of assets.

Some people are just unteachable. A few weeks ago i saw a poll in one of the telegram chat: " where do you store your coins?". And what do you think? Almost half of those who have voted keep their assets on exchanges.

Yes I agree with you.

Exchanges should be used for trading otherwise there should be no coins left on exchanges.

The lesson learned is that you should only have that much coins stored on an exchange you need for trades and IMMEDIATLY withdraw them as soon as you finished your trades. Exchanges may shut down from one day to another, happened to a lot of exchanges in the crypto space already.

i still do the same thing,because what?
i do it for quick trading if i see some big changes on market graph,
and of course i think twice or even more what exchange i choose for it.
and i never do that in exchange such a cryptopia,nova exchange,livecoin,coinexchange,
i am not saying that all exchange is same,but on this cases, they are have more more unfamiliar coins.
and i just think maybe not safe to saving our asset there.

Some people are just unteachable. A few weeks ago i saw a poll in one of the telegram chat: " where do you store your coins?". And what do you think? Almost half of those who have voted keep their assets on exchanges.

Cryptopia should have not opened and allow deposit after the hack in the first place, I think it is just a trap for the users.  I think they are finding way to give back what their investors had lost on that hack by liquidating the depositors token and funds.  They can just say they are closing and give time frame to enable users to withdraw their coins and tokens.  But  instead they just announced that they are closing and suspended withdrawals in a sudden.  That is a broad daylight robbery in my opinion.   I just hope that depositors can get their funds back.

It is obvious to me they tried to run their exchange as if nothing had happened and were expecting the community was dumb enough to believe in them again, but that did not happen so they changed their plan, while I really hope they do not scam the users that believed in them at the same time I do not know what they were thinking, why deposit your money in an exchange that was recently hacked and that is not allowing withdrawals? At some point they need to use their common sense and stop trusting in centralized exchanges.

Surely a well established exchange like cryptopia will have have plenty of reserves in it's cold storage wallets. Those are impossible to hack unless it is an inside job. Those funds should be enough to keep it going and cover the losses from the ethereum hack

Still they are not learning their lessons. Maybe, they are waiting to lose their entire portfolio before they realise that they need to keep their coins in their own wallet. Big and famous exchanges are not free from possible hacking incident, so you should always keep your coins safe and secure.

Cryptopia wasn't that small. Also they were on the market for a long time.

Still, this hack seems to me like an exit scam to me from day one. We learned again, never trust an exchange.

That is why keeping your trading or investments fund in an exchange is a very risky thing to do and we should be very careful whenever you hear about an exchange's platform been hack as it is few of them that do come out very strong again. Deposits funds may not all be withdraw before the  shutdown of cryptopia exchange and it is painful if one deposit money after the hacked and their are on able to withdraw before the shutdown.

This news is unfortunate, I just realize I opened the exchange but don't know how many coins I bought there yet. I have to make a check on that. I just hope I don't have much coin there, that is if I can still be allowed in.

Some people are just unteachable. A few weeks ago i saw a poll in one of the telegram chat: " where do you store your coins?". And what do you think? Almost half of those who have voted keep their assets on exchanges.

The lesson learned is that you should only have that much coins stored on an exchange you need for trades and IMMEDIATLY withdraw them as soon as you finished your trades. Exchanges may shut down from one day to another, happened to a lot of exchanges in the crypto space already.

I've been vocal on these boards about what a poorly run exchange I've found Cryptopia to be. I'm grateful I never left more on that exchange beyond a few coins that were on sell orders. However, it still sucks to have money unaccounted for, and I'll be following this debacle closely for sure. I agree with Jolly Good that it's just shameful that they reopened for deposits but not withdrawals. Stinks of an exit scam to me

Guys, who are using small centralized exchanges? And if you use it, why don´t you immediately send funds to your wallet?
Small exchanges are not regulated, they do not have insurance or enough funds to cover all loses.

I've been vocal on these boards about what a poorly run exchange I've found Cryptopia to be. I'm grateful I never left more on that exchange beyond a few coins that were on sell orders. However, it still sucks to have money unaccounted for, and I'll be following this debacle closely for sure. I agree with Jolly Good that it's just shameful that they reopened for deposits but not withdrawals. Stinks of an exit scam to me

I've been vocal on these boards about what a poorly run exchange I've found Cryptopia to be. I'm grateful I never left more on that exchange beyond a few coins that were on sell orders. However, it still sucks to have money unaccounted for, and I'll be following this debacle closely for sure. I agree with Jolly Good that it's just shameful that they reopened for deposits but not withdrawals. Stinks of an exit scam to me

Indeed. I was expecting something like the nicehash reimbursement program but to much damage was been done it seems. 

I guess they were trying to save the business,  they were hoping to see if some users will get back on again and continue trading after all what had happened. Of course its not that simple now that we've seen them vulnerable. Investors were given time to withdraw when they reopened, those who deposited took the risks. I doubt if there were many of them though.

Cryptopia should have not opened and allow deposit after the hack in the first place, I think it is just a trap for the users.  I think they are finding way to give back what their investors had lost on that hack by liquidating the depositors token and funds.  They can just say they are closing and give time frame to enable users to withdraw their coins and tokens.  But  instead they just announced that they are closing and suspended withdrawals in a sudden.  That is a broad daylight robbery in my opinion.   I just hope that depositors can get their funds back.

The liquidators are focused on securing the assets for the benefit of all stakeholders.

Investors lose all coins they had on exchange because some of them hold coins on exchange, but even so i don't know if they return all coins. Investors don't lose nothing after cryptopia enable and allowed deposit, but maybe cryptopia try to see if they can get new users and if they see the drop decided to close.

Investors lose all coins they had on exchange because some of them hold coins on exchange, but even so i don't know if they return all coins. Investors don't lose nothing after cryptopia enable and allowed deposit, but maybe cryptopia try to see if they can get new users and if they see the drop decided to close.