Battled Cryptopia Exchange Releases New Update and Statutory Report for Stakeholders
Grant Thornton, the liquidators of the hacked New Zealand bitcoin exchange Cryptopia, recently released a statutory report on the progress it has made. The legislative report was on its liquidation process.
The bitcoin exchange announced on its official twitter page:
The latest update for #Cryptopia stakeholders is now available. The next statutory report is due in early December and we will provide a formal update on the liquidation progress via this report. https://t.co/t6VDnjcKDx
— Cryptopia Exchange (@Cryptopia_NZ) October 25, 2019
In January this year, Cryptopia was a victim of a series of hacks, which resulted in the loss of millions in funds, most of which were ETH, and other cryptocurrencies. The exchange closed down operations to undergo maintenance and prevent further attacks, which did not bode well, as it was once again attacked towards the end of January, thus resulting in further losses.
Despite these hacks and losses, the New Zealand bitcoin exchange re-opened its operations and announced its plans on liquidation by appointing two liquidators: David Roscoe and Russell Moore.
The new report states progress has been made and plans are being put into action to foster the liquidation process. Cryptopia pointed out that, through the permission of the court, it has appointed the Queen’s Counsel.
A document ‘Memorandum of counsel’ reads:
“on 29 May 2019 this Court granted Orders permitting the Liquidators to deduct from NZD holdings and the realized Bitcoin holding of Cryptopia, their reasonable costs and expenses of and incidental to the protection, preservation, recovery, management, and administration of any digital assets held by the company […]”
The document reads again:
“The liquidators consider that the appointment of experienced counsel to represent the interests of the two stakeholder groups identified will facilitate the pragmatic and efficient determination of the Originating Application and is the interests of Cryptopia’s customers and creditors as a whole.”
Moving forward, the document pointed out that there are 921,629 positive account owners. The ‘Memorandum of counsel’ document also stated that the liquidators held cryptocurrencies worth NZD 12.7 million and NZD 6 million in assets.
“The Liquidators have identified several legal issues that require determination to enable them to complete the process of ascertaining the assets of the Company, and their obligations in respect of the Digital Assets.”
KYC/AML COMPLIANCE MANDATORY
For customers affected by the hack on Cryptopia, Grant Thornton stated that it would make use of the know your customer (KYC) requirements as part of the process to repay the lost funds.
However, the document stated that the liquidators only have the contact information of the 90 to 95% of account holders is their email address Id's, so as not to affect the service to customers. Hence, even customers that completed Cryptopia’s KYC step during the time of opening their account will need to submit the KYC requirements to claim their lost asset or funds.
The document reads:
“It is anticipated that some Account Holders will choose not to claim in the liquidation, for reasons including a wish to maintain anonymity, which is one of the features of cryptocurrency trading.”