Grant Thornton provides update regarding Cryptopia’s hack

In a blog post published on August 21, New Zealand-based crypto exchange, Cryptopia,  claimed to have made progress in securing and preserving Cryptopia crypto-assets holdings for the benefit of those affected by the hack earlier this year. 

Grant Thronton, a US-based accounting and advisory firm, was appointed as liquidators by Cryptopia post the suspension of their services in January. 

The blog post addresses the updates post those published in July. The crypto exchange claims to have possession of crypto data that was stored by a third party in the U.S and have been successful in accessing the data.

The firm has not been able to identify the source of the hack and are moving the crypto assets under their possession to a “safe non-hackable environment.” The crypto exchange further added that they aim to work with the New Zealand police and other international authorities to determine the source responsible for the hack, the blog post stated. 

The blog further outlined two reasons for the firm not being able to determine customer holdings. The first reason the exchange-listed out is that of customers not possessing an individual wallet, which makes it impossible to identify each customer’s holdings with just the keys. The second reason the firm has stated is that there was no reconciliation process done between the customer database, and the crypto assets held, making the process of determining customer holding tedious.

The blog also stated regarding the recovery of the assets  – 

“We are still determining how we can, or if we can recover crypto-assets that were hacked in January 2019. This is a complex situation with cooperation needed from third parties.”

The blog post further highlighted that the process of returning crypto assets to the customers is a long one. The firm is required to go through various legal procedures with the New Zealand courts and other international regulatory authorities. But the exchange platform claims to be working with their legal advisors to resolve the issue of returning the assets to the customers. 

Cryptopia-is-working-with-legal-advisors-to-determine-the-status-of-legal-assets-and-possibly-return-it-to-their-customers

The post concluded by stating that the Know Your Customer (KYC) process is a legal requirement in the country of New Zealand. Customers will be required to go through the process prior to receiving their assets. 

On January 14, New Zealand based crypto exchange in a series of twitter posts announced the suspension of its trading services. The suspension was the result of a security breach from an unknown source. The exchange platform, while expressing their distress, tweeted saying “security breach which resulted in significant losses.”