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Cryptopia shuts down after 8 hours down time

Maya Mandzikasvili | May. 15, 2019
Cryptopia shuts down after 8 hours down time

May 15, 2019, | AtoZ Markets - After the serious security breach in January 2019, that cost New Zealand based crypto exchange Cryptopia multi-million dollars in losses, the company has once again shut down its services after an 8-hour downtime. Does it mean that Cryptopia shuts down forever?

Cryptopia January hack in a brief

The Cryptopia’s team confirmed the hack in January 2019. The security breach resulted in significant financial damages. The company officials later confirmed that over 9% of their total holdings were stolen in the process.

A few weeks later, after the hack was detected, the report published by the Blockchain’s data analytics firm Elementus showed that Cryptopia hacking was not an isolated event. According to Elementus, Cryptopia’s platform experienced continuous attack and hackers regained control of the exchange, withdrawing funds from about 17,000 wallets.

As the cybersecurity experts assumed, the stolen funds were mostly mined tokens deposited directly to exchange from different pools. This explains why, despite the attacks, the addresses of the hacked wallet kept a constant flow of tokens. A few days after the attack, the hackers attempted to deposit stolen funds into Binance, but the exchange froze them.

Cryptopia shuts down after reopening deposits and withdrawals in April

Cryptopia made a second attempt to regain its reputation and resumed its service one month ago. Reopened withdrawals and deposits allowed users to claim a certain percentage of their balances. The New Zealand-based company has announced on its Twitter account that it is starting to list 40 trade pairs, which it “quantifies as safe”.

The subsequent to this Tweeter, e-mail issued by the Cryptopia office indicated that it would place the Cryptopia Loss Marker (CLM) in place of the missing funds. The exchange supposed to use CLM as a means to assess the loss of an individual in the New Zealand dollar (NZD) after hacking.

Cryptopia also confirmed that it will start giving way to its customers through fair logistics.

However, today, after an 8-hour downtime, the New Zealand exchange posted a message indicating, that company was unable to “to reduce cost and return the business to profitability” and it was decided to appoint David Ruscoe and Russell Moore from Grant Thornton New Zealand as Cryptopia liquidators.

Despite their attempt to resume business as usual and with the recent price rise of cryptocurrency, it seems that the company did not manage to recover. As per Cryptopia’s message, liquidators will work with the exchange to secure assets and return as much of them as possible to affected users. Such an investigation will take months to complete.

Cryptopia users should expect to be contacted by Grant Thornton for further steps, most likely via the email used on the exchange. While Cryptopia liquidation process and investigations take place, trading on the exchange is suspended.

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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.