Liquidating New Zealand crypto exchange Cryptopia has announced that it has halted trading and frozen customer assets and balances, “In order to… get an accurate picture of the current situation.”
Accordingly, no withdrawals of fiat or crypto will be permitted by the exchange until, “…an extensive process to confirm amounts owing and available to return to customers,” is completed.
Cryptopia went into liquidation this week after finding, “…it could not meet its debts as they fell due.”
Business advisory firm Grant Thornton is handling the liquidation.
According to the latest announcement from Cryptopia, the process will take, “…months rather than weeks,” and the beleaguered exchange also cannot promise, “what will be returned…”
By all appearances, affairs began to melt down at Cryptopia following a massive hack in February.
There are also rumours circulating that the exchange was insolvent even before the hack.
Blockchain forensics firm Elementus extensively documented the days-long hack on Cryptopia.
The company claims that Cryptopia administrators watched helplessly for days as hackers casually siphoned an estimated $16 million USD in crypto tokens out of multiple exchange and customer “hot wallets” (accounts accessible by Internet):
“Cryptopia no longer has control of their Ethereum wallets, and the hacker still does. The hacker has the private keys and can withdraw funds from any Cryptopia wallet at will.”
Elementus also claimed the same hackers struck again two weeks later and continued to withdraw funds.
Elementus also claimed that Cryptopia users, possibly miners with automated deposits set up, we’re still loading their trading accounts as the hack was underway:
“Despite the hack, many Cryptopia users continue depositing funds into their Ethereum wallets. In just the two hours since these breaches took place, many of the very same Ethereum wallets that were just drained have already been topped up with more ether.”
Dedicated crypto news site CCN has written that, “…Cryptopia was especially popular with altcoin enthusiasts since (sic) 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.”