- Cryptopia was hacked in early 2019.
- A recent steemit post indicated that the fall of Cryptopia may be attributed to Intranel.
Cryptopia has been one of the most notable hacks of 2019 so far after alleged hackers had gone into consumers’ wallets and pulled funds. Shortly after this event happened, the platform notified authorities, shutting down their exchange in the process. The company tried to relaunch several months later and ultimately failed. Now, new information is coming out about this situation, suggesting that the attack may be the result of insider work.
Vcdragon, who used to be a developer and co-founder with the Cryptopia exchange, released evidence that supports how the exchange was ultimately destroyed by Intranel. Tweets were posted by a user named @notsofast, linking to an article that describes
“the complete story of the fraudulent hostile takeover of Cryptopia_NZ by Intranel from its founders Adam and Rob.”
According to this user, the hack was no more than an inside job.
I've had to cryptically dance around talking about this for months, but here, finally, is the complete story of the fraudulent hostile takeover of @Cryptopia_NZ by Intranel from its founders Adam and Rob.
It is alleged Intranel inside-job hacked Cryptopia. https://t.co/s58AW79dcx
— notsofast (@notsofast) July 18, 2019
Vcdragon, who wrote the steemit post, said that the creation of Cryptopia was originally meant to be a hobby project in January 2014 between himself and co-founder Adam of Intranel. However, as the project gained momentum, Adam chose to step down from Intranel, where he formerly worked as a developer.
The steemit post explained that Intranel was not happy about losing Adam and ended up offering the co-founders a room at their company office to rent. The interest grew as the exchange took off and the cryptocurrency market started to book.
At the beginning of 2017, the co-founders felt that Intranel could offer business development support. Vcdragon explained,
“Intranel made up an offer that, for 20% of the company, they would handle all of the business management and development things like helping with hiring and managing staff, paying tax, lobbying for regulator guidance, and all the ‘boring’ business stuff.”
During these discussions, the firm also offered to contract four staff members to the developers at a lower rate, offering assistance to find the right talent for the exchange. However, that’s when things started changing. As the lengthy post went on, Intranel hired staff members for themselves, contracting them to Cryptopia at substantial rates. The staff were given broad managerial control, and Intranel ended up demanding more equity after Cryptopia started becoming dependent on the staff.
At some point, Adam left and vcdragon went on a vacation from the company, under the recommendation of Intranel. During the month that vcdragon took off, he wasn’t paid, and he came back to his workspace being taken over. He added that everyone was issued dividends by Intranel but himself and Adam, and Intranel
“forced the extra 5% as they needed the extra shares to block any major transaction the company tried to undertake so that we could not achieve a 75% threshold.”
From there, vcdragon says that Intranel essentially blend Cryptopia dry, while still absorbing the platform into themselves as the main owners. Allegedly, Intranel issued a loan to their own firm for $300,000, stating that the funds were necessary for “startup costs,” as they continued to use Cryptopia’s name to serve clients, which they charged the exchange for.
The post explains,
“They bled money everywhere they could, we paid for tax on their staff’s flu shots? We paid taxes on Christmas fits to their staff and our company bought the gifts. Everything they were unable to take for themselves they pissed into the wind on needless expenses and luxuries to the company could not afford….that ultimately buried us.”
It looks like there have been three separate instances that Intranel tried to sell Cryptopia without the knowledge of the co-founders. When the two entities were finally (and forcibly) separated from each other, the company was facing bankruptcy.
At the end of the post, vcdragon says that he believes that the hack was actually an inside job that was used to try and cover up all of the poor business practices, adding that the plan to basically destroy and absorb Cryptopia was interrupted with this removal. However, he expressed fears that the trouble isn’t over since Intranel is partnered with a bank that had previously chosen not to offer banking services to Cryptopia called ANZ. They are also partnered with PWC, which has been involved with Cryptopia’s legal counsel.
What do you think happened?