Former Cryptopia Employee, Admits to Stealing $175k Worth of Crypto from the Defunct Exchange

  • Former Cryptopia Ltd. employee pleads guilty to stealing NZD 250,000 worth of Bitcoin (BTC) and other cryptocurrencies from the exchange.
  • The employee returned the funds and will not face any charges.

A former employee of the now-defunct New Zealand-based cryptocurrency exchange, Cryptopia pleaded guilty to stealing almost NZD 250,000 worth of cryptocurrency and customer data while working at the firm, New Zealand media station, Stuff, reported. The employee, who asked for an interim name suspension, has since returned the digital assets and is asking for the charges to be dropped.

In a hearing before the Christchurch District Court Judge Gerard Lynch, the former Cryptopia employee admitted to two charges and is awaiting his sentencing in October. The employee is remanded on bail on account of theft by a person in a special relationship and theft of assets of more than NZD 1,000.

According to a statement from the hearing, the former employee is said to have raised complaints previously on the security of private keys but to no solution. This prompted the employee to make an unauthorized copy of private keys during his time at the firm and store them on a USB drive.

With a vast number of private keys, the employee had access to close to $100 million worth of cryptocurrencies in users’ wallets, the statement further reads.

However, once the exchange went bankrupt and closed its doors, there was no way for Cryptopia to know whether users’ accounts were compromised and any theft could go under the radar. In September 2020, Grant Thornton, who is in charge of the exchange, noticed 13 unauthorized transactions on Cryptopia’s wallets leading to an investigation.

Nonetheless, a week later, the employee turned himself in and admitted to stealing NZD 250,000. The culprit returned six Bitcoins stolen from the exchange – returning the remaining amount a few days later.

“The defendant admitted that he was frustrated with Cryptopia but also motivated by the belief that he could get away with the theft as he thought nobody would ever check the old deposit wallets,” the court summary reads.

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