Welcome to our Cryptopia news page. Here you’ll find some of our featured Cryptopia Exchange content pieces as well as all our latest Cryptopia Fund Investors posts.
You probably remember Cryptopia, a New Zealand-based crypto exchange which was hacked two times in January 2019. Since then, the people at the company have been working a lot to make the company ready for the relaunch. Now, in preparation for that, the company has recently affirmed that 35% of its total coins have been put on new wallets.
According to the company’s official Twitter profile, the tokens were moved in order to prepare for the relaunch. They also asked the users to keep an eye on their official page in order to know if more updates come up.
Cryptopia is slowly but surely moving in the right way to recover the losses and start its business again. The exchange recently opened the option for its users to cancel orders and this move was welcomed by most of the users, too.
The company affirms that it is working to complete its full relaunch and that the API is still disabled at the time of this report but you can go to the company’s site and cancel any order before the exchange comes back online. This is being done in order to prevent the users from losing money from old orders when the platform is finally online.
Since the hacking happened on January 14, the company had no choice but to shut everything down quickly. Because of this, all processes were stopped and the price of many cryptos is very different now than it was two months ago.
If people do not have the option to cancel their orders, not only their money was locked for a big amount of time in the platform, but they will incur even more severe losses again.
Therefore, the company has deemed that the option to let the users cancel the orders was necessary before the relaunch or their users would be hurt a second time and this time fully by a mistake made by the company.
Recently, the exchange has also announced that it was reopening its site, however, it was in read-only form for now. The exchange also affirmed that the pre-hack holdings of all the users would be used as a base for calculating any rebate in the future.
All users are required to reset all of their passwords and credentials as well, as there is a chance that they may have been compromised.
Police officers investigating the hack of Cryptopia have surprised investors recently as they affirmed that the company might start to work again within the new few weeks. Such a quick recovery was very unexpected as the crypto exchange was hacked on January 14 and it lost over $20 million USD worth in cryptos.
Soon after the money was stolen, the crypto exchange decided to enter “maintenance” and everybody was unable to use the platform. At the moment, the “maintenance” continues as the police investigate the hack.
However, soon after an email from the police surfaced, it was affirmed that the exchange will be back on its feet sometime in February. The letter describes the investigations as “complex” and it does not state whether the funds that were stolen from the clients will actually be given back to them or not, which is mostly their fear at the moment.
Things got an even bleaker course after the exchange was hit by hackers by the second time, though. According to the official police reports, 5,240 wallets were hacked this time and around $180,000 USD worth of Ethereum (ETH) was stolen by the criminals this time.
It looks like Cryptopia has almost fully lost control of the situation as the hack, which occurred on January 28, took most of the day and it was done by the same thief. Some people are currently speculating that the exchange does not have the keys to its wallets anymore and that they belong to the hacker now, which is simply the worst case scenario in a situation like this one.
Because of this, some people, unaware of what may have happened, used the addresses provided by the company, which led them to lose their funds, which were stolen by the hacker.
Even with the police stating that the company is set to open its doors again in the next few days, people are obviously still very scared of what may happen. Crypto tax specialist Campbell Pentney has talked about the issue with Newsroom.co.nz and affirmed that people are right to be afraid.
According to the law expert, the hacker is still taking the funds, which suggests that the exchange may have completely lost control of their own crypto wallets and this raises several concerns on whether these funds will ever be retrieved.
In situations like this one, the expert affirms, nobody knows how to trust and the company does not communicate very well with its customers, which causes a severe lack of trust and everything is treated with skepticism.
The evening of January 13th was quite an unfortunate one for Cryptopia. The crypto platform was hacked to a tune of $3.5 million in cryptocurrency.
Cryptopia is a small exchange platform that trades an average of $2 million on a daily basis. Recently, a percentage of the funds were transferred to Binance cryptocurrency exchange.
Addressing the incident, the CEO of Binance, Changpeng Zhao, made a decision to freeze the funds. This was after the hackers had already managed to send 31,320 Metal (MTL) ERC20tokens to Binance. The tokens were trading at $0.24, thus at least $7,500 was stolen in cryptocurrency.
He also questioned the fungibility and privacy that surrounds cryptocurrency. Now that the funds have been frozen, and the New Zealand authorities are involved, hackers may be trying to find alternative ways to convert and launder the funds.
Just like in economics, fungibility in the crypto world is the notion that any coin is identical and can be substituted for another in the same denomination. Similarly, one may reason that all bitcoins are equal and all have the same value.
However, it all comes down to how it can be traced. Bitcoin that has been subjected to criminal activity or fraud can no longer be comparable in value to a ‘clean’ bitcoin. Such coins could end up being blacklisted on exchanges, and the future recipients may face legal penalties.
Freezing the hacker’s funds was the right thing to do. Crypto exchanges must always work together to curb such incidences of illegal activity. On the other hand, how Binance identified the stolen funds and was able to get a hold of part of it has raised concerns.
In a scenario where a person accepts $20 in cash, he or she cannot trace the previous owners. However, a person who receives $20 in bitcoin can do so using the previous wallet addresses that are linked to that every transaction. It would not be easy to lawfully address such circumstances and as such false accusations and judgement may arise.
It’s easier to know if commodities or goods are purchased unknowingly. Laws can be enforced rightfully and authorities have the right to seize the stolen goods.
Individuals, businesses, and exchanges may have to go through similar processes, though, it may bring about difficulties in the crypto transaction process and an increase in costs.
Crypto users have been taking precautions such as personal identification, keeping wallet addresses anonymous, using a new wallet address during each transaction and using cryptocurrency mixers.
They have also found other effective ways of obscuring the history of previous transactions of funds prior to making new purchases.
Until there is clarity in fungibility issues, law enforcement and regulators will set clear standard actions in case of money laundering or other illegal activities involving crypto.
Monero and ZCash are privacy coins that may have a solution to obfuscate transaction history. Nonetheless, these two coins need to work along with already established networks like Ethereum and Bitcoin.
Fifteen days were enough for hackers to break once again into Cryptopia’s wallets and steal 1,675 ETH from their wallets. According to some reports, after losing $16 million two weeks ago, attackers were able to steal 1,675 Ether (ETH) from 17,000 different wallets at the Cryptopia exchange.
There were some previous warnings that mentioned that almost 2k wallets were ar risk. Apparently, the hackers had access to the wallets of the exchange and were able to take funds out during several days without Cryptopia being able to stop it.
On January 28, the funds started to be moved in the morning and continued to be moved towards this address:
Etherscan = 0x3b46c790ff408e987928169bd1904b6d71c00305
However, it was not clear at the moment whether it was the exchange that was trying to secure the funds or just another attack that the platform was experiencing. And indeed, there was another attack. The report says that the exchange does not have control over their Ethereum wallets, meaning that they do not have access to their private keys and that the hacker controls them.
Cryptopia is a New Zealand-based cryptocurrency exchange that offered different coins to its users. This is not the first time that there is an attack on a cryptocurrency exchange. In general, crypto platforms are targeted by criminals due to the fact that is very easy to steal several funds in just an attack.
The exchange has already lost $16 million worth of Ethereum and ERC20 tokens. Some of these tokens were Centrality, Lisk ML, Dentacoin, Oyster Pearl, Daps, Golem, and OmiseGo, among others.