Grant Thornton, which serves as liquidators for hacked New-Zealand cryptocurrency exchange, Crytopia, recently released an updated report on its activities so far. According to a report on its website on August 21, 2019, the liquidators, among other things, successfully recovered customers’ data that was previously in the possession of a U.S. based third-party service company.
Cryptopia Liquidators to Protect Recovered Cryptocurrency Assets
In May 2019, an Arizona-based server company threatened to erase all the data of all Cryptopia account users. The company also had plans to terminate its contract with the cryptocurrency exchange, and further demanded $2 million from the platform.
However, things seem to have cleared up as Cryptopia’s liquidators, Grant Thornton, stated in a recent update, that they had successfully gained access to customers’ data. The data contained records of customer holdings and some cryptocurrencies.
Grant Thornton added that there was an ongoing collaborative effort with New Zealand authorities to determine the real cause of the January 2019 hack and was also taking preventive measures for the recovered virtual currencies, to avoid a repeat of the incident.
Customers Have no Individual Cryptocurrency Wallets
While the liquidators were able to access customers’ data, the report revealed that the bitcoin exchange company did not store customers’ cryptocurrencies in individual wallets. Instead, the platform “co-mingled” virtual coins in cryptocurrency wallets.
Part of the report reads:
“We are working to reconcile the accounts of over 900,000 customers, many holding multiple crypto-assets, millions of transactions and over 400 different crypto-assets). These must be reconciled one-by-one.”
Grant Thornton is seeking to get achieve this feat manually, which is a rather tedious process, considering the number of accounts and transactions. The liquidators, however, state that the process has begun but would take a while before completion.
In addition to working around reconciling over 900,000 accounts, the report also said that customers of the liquidated cryptocurrency exchange must complete the know your customer (KYC), regardless of whether customers had earlier completed KYC requirements, in order to get their funds back.
Patience is Required
In May 2019, Grant Thornton revealed via an earlier report that the bitcoin exchange company had an outstanding debt of over $4 million while trying to recover customers’ funds.
Cryptopia’s hacks within January 2019, saw the loss of significant funds that led to the exchange shutting down. While the company tried to get back on its feet at some point, the scale of the attack was too much for the platform to handle, leading to liquidation.
The time frame for the completion of the liquidation process cannot be accurately determined, according to Grant Thornton. Also, the liquidators state that it would seek directives from New Zealand courts before making repayments to affected Cryptopia customers. The firm promised to keep customers abreast of its progress from time to time.