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Cryptopia bankruptcy update: US database provider demands $2 million

Maya Mandz | May. 27, 2019
Cryptopia bankruptcy update: US database provider demands $2 million

May 27, 2019, | AtoZ Markets - According to the latest Cryptopia bankruptcy update, the third-party vendor Arizona, which maintains accounting database of the recently hacked exchange demands from the company $2 million for the data they have.

Cryptopia liquidators in their turn have applied to the U.S. court to secure user data stored in the USA as part of refund proceedings.

Cryptopia’s hack leads to its liquidation

It has been a difficult time for the New Zealand crypto exchange Cryptopia, after the serious security breach in January 2019, that cost exchange multi-million dollars in losses. Eventually, in May 2019 the company announced shutting down its services.

In its message to the users, the New Zealand crypto exchange announced that it decided to appoint David Ruscoe and Russell Moore from Grant Thornton New Zealand as Cryptopia liquidators.

According to the previous Cryptopia bankruptcy update, the liquidators would work with the exchange to secure assets and return as much of them as possible to affected users. The crypto exchange also noted that the investigation would take months to complete.

Arizona terminates its business with Cryptopia

Cryptopia bankruptcy update states that the liquidation process under Grant Thornton leadership may take some time. Thus, the crypto company requested its users to keep patience, promising to resolve the issue as soon as possible.

It is worth to mention, that this crypto exchange does not contain proper accounting database and it is maintained by third-party vendor Arizona.

The never-ending story of Cryptopia suffering has taken another turn when Arizona has demanded 2 million dollars for the crypto exchange's data they have.

The media reports, that Arizona wants to terminate all the business with the exchange and if the money is not given, Cryptopia may lose all the database forever.

Grant Thornton applies for the Cryptopia's data protection

Although the company still possess’ assets worth millions of dollars, stolen $16 million, seem to be lost forever.

A few days later after Cryptopia announced about its liquidation, the analysts from the blockchain company CoinFirm, reported that hackers who managed to acquire $16 million in ethereum started moving stolen funds into separate wallets, including two wallets directly connected to a Singapore-based global crypto exchange Huobi.

According to the Cryptopia bankruptcy update, the crypto firm's liquidators have already applied to the U.S. Court to secure Cryptopia’ user data stored in the United States as part of refund proceedings.

Grant Thornton also confirmed that it had applied for urgent interim relief at the Bankruptcy Court in the Southern District of New York on May 24. The filing requested the U.S. court recognize the New Zealand liquidation process and secure Cryptopia’ user data stored in the USA as part of refund proceedings.

Will Cryptopia’s vendor return company’s data for free?

Cryptopia liquidators outlined their data protection request, by stating, that they took "these steps to preserve the Cryptopia information that is stored and hosted on Arizona-based servers"

Grant Thornton representatives explained that the aforementioned third-party vendor “preserves Cryptopia's SQL database containing all account holders’ individual holdings of cryptocurrencies and the account holder contact details.”

Liquidators emphasized, that reconciling individual holdings with the currencies held by Cryptopia will be impossible without this information.

Will Cryptopia manage to get its data back without paying $2 million as was requested by Arizona vendor? Only time will say.

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Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ, nor should they be attributed to AtoZMarkets.