Cryptopia Liquidator Updates Stakeholders, Return Of Funds May Take Long

Liquidators Grant Thornton New Zealand have released an update for Cryptopia account holders and other creditors following the shutting down of the New Zealand-premised crypto exchange. The liquidator said it has made big strides in the determination of customer holdings, but how the funds were managed by the exchange will cause more delays.

In the latest update released on 20th August, the liquidators say they have also recovered the Cryptopia customer database from the Arizona based PhoenixNAP which acted as Cryptopia’s data centre. Previously, the liquidator had filed and granted bankruptcy protection in the US to protect the data held by the company.

The update offers a glimpse of how the defunct exchange was been managed in its explanation why return of funds has taken this long.

According to Grant Thornton Cryptopia customers were not given individual wallets saying that digital assets were pooled together in coin wallets. Essentially this meant that Cryptopia operated a centralized exchange where trades would happen within its internal ledger and no confirmation on the blockchain.

In this case, the liquidator says its very difficult to establish individual ownership via the keys in users’ wallets. However, the exchange had customer records on holdings amount and the information was kept on the exchange.

The liquidator adds that the exchange did not reconcile its client’s databases with the amount of crypto assets held in its wallets. Therefore, the liquidator will have to manually compare the database with the wallets to establish customers’ holdings.

The liquidator is hopeful that the tedious process will help in showing what individual accounts hold, adding that the process has already started but will consume a lot of time. The liquidator said:

“We are working to reconcile the accounts of over 900,000 customers, many holding multiple crypto-assets, millions of transactions and over 400 different crypto-assets. These must be reconciled one-by-one.”

As per the update, the liquidator said it is still working to move the remainder of crypto assets held by the exchange into secure environment since it is not yet known how the hacking was executed.

Grant Thornton also indicated that it was working closely with both local and international authorities to identify the hacker and retrieve the funds.

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