Hacked Crypto Exchange Cryptopia Files for US Bankruptcy Protection

Cryptopia has filed for bankruptcy protection in the U.S. seeking to preserve vital user data held on servers in Arizona

AccessTimeIconMay 27, 2019 at 10:00 a.m. UTC
Updated Sep 13, 2021 at 9:14 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Hacked cryptocurrency exchange Cryptopia, which went into liquidation earlier this month, has now filed for bankruptcy protection in the U.S.

Cryptopia’s assigned liquidator, professional services firm Grant Thornton New Zealand, announced Monday that it has taken the step to preserve Cryptopia data stored and hosted on servers with an Arizona-based firm.

The bankruptcy court in the Southern District of New York issued an order to Cryptopia on Friday, granting an emergency motion for provisional relief till June 7.

Grant Thornton said:

“The interim order preserves the Cryptopia data, which includes a SQL database containing all account holders’ individual holdings of cryptocurrencies and the account holder contact details. Without this information, reconciling individual holdings with the currencies held by Cryptopia will be impossible.”

The process of recovering the data and determining how to make distributions to account holders will take “some months at least,” the liquidator said.

According to a report from Bloomberg, the Arizona firm is terminating services with Cryptopia and is seeking $2 million in compensation. If that money is not forthcoming, the report suggests, the exchange's liquidators fear the vital user data could be lost irretrievably.

Cryptopia was hit by a major hack in mid-January resulting in “significant losses.”  Later, it restarted trading services amid banking issues, and finally went into liquidation and suspended trading operations earlier this month.

A blockchain data analytics firm estimated after the hack that as much as $16 million in ether and ERC-20 tokens could have lost.

Grant Thornton was expected to file an initial report on the case last week on the New Zealand Companies Office website. But the New Zealand Court granted a 10 working day extension and the report is now due on June 4, Cryptopia said last week.

Cryptopia image via Shutterstock 

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.