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 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.
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
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.