Cryptopia’s Lack Of Database Backup Could Result In $2 Million In Loses As Liquidation Headway Slows
Cryptopia Has No Backup And May Never Make Headway With Liquidation
A few months ago in the first quarter of 2019, Cryptopia – a cryptocurrency exchange based in New Zealand – was targeted by cybercriminals who successfully hacked it, causing the firm to lose about $16 million worth of funds in different cryptocurrencies. The firm went offline for a short while but then eventually resumed its services. However, Cryptopia couldn’t keep up with the loss and eventually decided to fold up, choosing Grant Thornton as official liquidators.
Cryptopia Can’t Catch A Break
It would seem now that proper liquidation might be impossible which also means that funds can’t be returned to affected customers. Since the liquidation was officially announced, it hasn’t made a lot of headway for one major reason. Apparently, Cryptopia’s only backup of its database is not being controlled by the firm itself. The database is being hosted off-site by a different firm, which is a third-party service provider based in Arizona.
In 2014, Cryptopia was founded by the duo of Rob Dawson and Adam Clark and at the time it was not really a fully specialized endeavor. As a matter of fact, the duo did not work on it full time and only quit their respective jobs three years after, to work full time on the exchange. However, even if we’re to excuse the beginnings of the project, it’s difficult to continue to do that till today. Investigations have shown that the firm was still handling its business in a very outdated and unexpected manner.
Currently, Cryptopia reportedly still owns a lot of assets valued and tens of millions of dollars. However, the process of getting into all the wallets is very difficult and time consuming one. The funds apparently cannot be properly distributed to its rightful owners as there is no proper record of its accounting database with the firm. It has been assumed that this much carelessness probably extends to the firm’s security in many ways, making it easy to hack.
It’s supposed to be quite easy to at least get the information needed because the database is just not with Cryptopia but isn’t lost. However, it apparently isn’t that easy. News has just come to light that this Arizona firm is looking to stop providing services for Cryptopia and is also seeking compensation to the tune of $2 million. This is because they are being owed a lot of money, unsurprisingly. It’s possible that the firm, which is now the only place the information can be gotten, could actually get rid of the data, consequently ruining the already slim chance Cryptopia currently has. If its services are not been paid for, the firm is under no obligation to continue holding the data.
It is now obvious to many that the Cryptopia management hasn’t been making the best of decisions since its inception and are now reaping the “fruits” of their decisions. Sadly, the biggest losers in all these are the unsuspecting customers who were loyal to the firm and used it for all their crypto needs.
At the moment, there’s no word about how Cryptopia or Grant Thornton would handle the situation. Investigators are still trying to recover wallets but there has been little or no success with that. Cryptopia also cannot use the funds it currently holds to pay the Arizona company has it would still cause a deficit somewhere. Apparently, nothing short of a proper miracle will fully solve the Cryptopia problem and see funds return to its users.
Founder Might Be Launching New Exchange
Adam Clark, the co-founder of Cryptopia might be silently working on floating a new cryptocurrency exchange. The new one, Assetylene, is
“New Zealand’s most advanced crypto-currency exchange”,
according to its Twitter page @Assetylene_NZ. It would also seem that work on Assetylene had already started before Cryptopia’s woes began.
Regardless, we wait to see if and when Assetylene will fully begin trading.