It appears 2019 is claiming its first crypto exchange victim, despite a gain in prices and a somewhat stable market Cryptopia crypto exchange has decided to appoint liquidators to liquidate any remaining assets. According to a press release published on Cryptopia’s website, David Ruscoe and Russell Moore from Grant Thornton New Zealand were appointed to lead the liquidation process.
Cryptopia was hacked back in January, costing the cryptocurrency exchange almost $4 million worth of cryptocurrencies in losses at the time. However, the cryptocurrency exchange announced in March its plans to slowly resume part of its operations to try and recover from the major security breach, although it appears the management efforts were not enough to keep the business afloat. The investigation process held by the local authorities (which remains ongoing) forced Cryptopia to enforce security measures within its platform, making major changes that were recommended by the authorities.
As for the liquidation process, it will aim to secure the assets for the benefit of all stakeholders, customers and staff members, while there’s also a pending investigation of the hacking episode that’s still taking place. According to Cryptopia’s team, the investigation process is expected to take months due to the complexity of the case. It is unclear what will happen with the unfortunate parties that lost their funds due to the hack, but it appears the top priority for the crypto exchange is its stakeholders.
As for the investigation process goes, Cryptopia is working with independent experts and the local authorities to determine the cause of the security breach and to further evaluate the responsibilities and obligations the company has in regards to the situation.
Cryptocurrency exchange hacks are becoming really popular amongst hackers, with the most recent one being Binance, claiming to have lost around $40 million worth in cryptocurrencies. Luckily for Binance customers, the crypto exchange had a Secure Asset Fund for Users (SAFU) system in place, which is an emergency insurance fund used for situations like this.
Crypto exchange hacks are also forcing the hand of governments and regulators, making it more difficult and complex for them to establish a regulatory framework that allows growth in this type of business. Just a few weeks back, Japan announced its plans to strengthen regulations against cryptocurrency exchanges to ensure the security of assets for its customers.