Cryptopia Limited Files for US Bankruptcy Protection Following Massive Hack in Early 2019

  • Cryptopia Limited was hacked multiple times in the first quarter of 2019.
  • The shareholders of Cryptopia have decided to file for bankruptcy in a Chapter 15 case in New York.

The hacking of the Cryptopia exchange made headlines in January after a massive attack took $16 million from the exchange. The exchange was the host of 300,000 accounts worldwide, even though the platform was only established as a hobby in 2014. Bitcoin’s massive surge in 2017 led that company to more success, according to the court documents that were filed in Manhattan on Friday.

The theft specifically involved client assets, and Cryptopia quickly spoke with the authorities about the cybercrime. In March, the exchange appeared to have already handled the problems, allowing account holders to access the trading platform again for exchanging their assets. However, when the platform saw more issues, the shareholders collaborated to decided to fold the company, as documented in a declaration filed with the courts.

Liquidators are still working to collect and distribute all of the tens of millions of dollars in digital assets that Cryptopia held. In the process, the liquidators are still trying to figure out what amounts are due to which account holders. Unfortunately, this data is held with a company in Arizona that is demanding $2 million from Cryptopia as it terminates their connection with the platform.

Without paying the Arizona company, the liquidators are concerned that the data from Cryptopia could be overwritten or lost forever. The liquidator stated that the loss of this data “would be potentially catastrophic” for the recollection efforts. As far as the hacked wallets go, the liquidators assured that “efforts are still being made,” but they have remained unsuccessful in recovering the stolen funds.

During the liquidation, the court documents indicate that every account holder from Cryptopia is considered a possible creditor in the case. Trade creditors are presently owed around $2.6 million. This case, considered a Chapter 15 case, which is being handled in the Southern District of New York (Manhattan).

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