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Why Won’t Crypto Exchange Cryptopia Come Clean on How Disastrous Last Month’s Hack Really Was?

Last Updated March 4, 2021 2:53 PM
Mark Emem
Last Updated March 4, 2021 2:53 PM

New Zealand-based cryptocurrency exchange Cryptopia disclosed that local police have allowed employees to return to the firm’s office following its suspension of operations mid last month after a multi-million dollar security breach. In the latest update, the cryptocurrency exchange has indicated that investigations are still ongoing, however.

Hacked Crypto Exchange Reopens

Cryptopia’s announcement comes shortly after the police gave the crypto exchange the green light to reopen. The New Zealand Herald  reported on February 13 that law enforcement had finished their main investigations. Per Detective Inspector Greg Murton of the High Tech Crime Group, the police had consequently okayed the resumption of normal operations:

“We have finished the main part of the work required by the High Tech Crime Group [HTCG] at Cryptopia’s business premises, although HTCG staff remain there finishing up aspects of their work. Cryptopia management have full access to their facilities and business premises and the Police investigation is not preventing their business from getting up and running again.”

Cryptopia Stays Mum on Losses Incurred, Leaving Users Frustrated

Even after the green light from the police, Cryptopia has been vague concerning the extent of the losses. This has left some users and investors in frustration as they are unable to access their accounts or even tell the extent of the losses.

The full picture of the losses became blurred just days after the security breach. Initially, it was believed that the exchange had lost approximately 19,390 ETH. At the time the value of the Ethereum was estimated to be worth $2.4 million, though it has slightly appreciated.

But an investigation conducted by blockchain analysis platform Elementus later disclosed that the exchange had actually lost assets worth $16 million.

Ethereum Wasn’t the only Crypto Stolen in the Hack

Elementus also revealed that the exchange had not only lost Ethereum but also other cryptocurrencies. These included Dentacoin, Lisk, Centrality, Zap, and Pillar. The hackers allegedly moved the digital assets from Cryptopia to various other crypto exchanges include Binance, Huobi, Kucoin, HitBTC, and Bittrex.

It is understandable that users are frustrated at the poor communication from Cryptopia. This is because the information that has so far been obtained has come from external sources. New Zealand police have also been coy as they have refused to shed light on the value of cryptocurrencies lost.

Besides the amount that was stolen still remaining a mystery, the security breach was also out of the ordinary. Rather than gaining backdoor access into the cryptocurrency exchange, the hackers targeted user wallets. The number of wallets whose private user keys were obtained by the hackers is estimated to be over 76,000.

Audacious Cryptopia Hacker Came Back for More

Another baffling thing about the security breach is that it is believed to have continued nearly a fortnight after the first attack.

Per Elementus, which also discovered the second breach, it was the same hacker (or group) that struck the second time. But as with the initial hack, Cryptopia has yet to address this for the benefit of its users.

“Mum” remains the operative word.

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