In an update released earlier today following the announcement that it had gone into liquidation, Cryptopia has warned users that they may not get all their funds back, if at all.
Per the exchange, an investigation is underway to determine ‘the amounts owing and available to return to customers’. Before then, the cryptocurrency exchange cannot give clients any guarantees that they will get all their funds back:
Until the investigation is complete, we cannot return any crypto-assets to customers, or confirm whether individual customers will get all of their crypto-assets returned.
According to Cryptopia this investigation process is complex and might require ‘direction from the New Zealand Courts’. Additionally, the investigation is expected to take months. The exchange has already frozen deposits and withdrawals on its platform. Some users of the exchange have taken to Twitter casting suspicion on the whole debacle.
Amidst all the uncertainty, Cryptopia has admitted that the security breach five months ago is the root of all its problems. Cryptocurrencies worth approximately $15 million (NZD$23 million) are estimated to have been lost to hackers following the breach. Specifically, Cryptopia has stated that disclosed that ‘the hack earlier this year contributed to the issues which led to the liquidation’. Consequently, the exchange ‘could not meet its debts as they fell due’.
The freezing of all crypto assets deposited to Cryptopia will affect all including those not impacted by the January hack. Users will also be unable to get a screenshot of their balances until the investigation has been completed.
As a cryptocurrency exchange Cryptopia was especially popular with altcoin enthusiasts since owing to its extensive portfolio. Around 457 coins were listed on the platform before the hacking. By January 2018, it boasted of approximately 1.4 million users. These users will now have to look elsewhere as the exchange has no intention of resuming trading ‘at this stage’.
The sudden liquidation of Cryptopia might be particularly galling to traders on the exchange who had endured the long crypto winter. This is especially so for those who might have been looking to book some gains following the rally.
Unfortunately, their crypto assets remain frozen and can only wait and hope that the market does not reverse. On the day the exchange announced that it was going into liquidation Bitcoin had just hit the yearly high above $8,000. Now it has plunged by nearly 10 percent to trade just below $7,300.
Last modified: March 4, 2021 2:32 PM