Cryptopia, which has been repeatedly taking major hits from the blockchain industry has just filed for bankruptcy protection in the United States of America.
According to the file, the New Zealand-based cryptocurrency exchange has entered a dispute with a US, specifically Arizona-based company which was entrusted to keep the exchange’s database stored.
The file also details the fact that Cryptopia and the company have entered in a dispute which caused the Arizona company to demand $2 million in compensation.
Naturally, Cryptopia simply does not have that amount of funds. Some say it does, but according to the executives, all the funds that are now under Cryptoia’s name are for refunding its customer base.
Why is the database needed so much?
According to Cryptopia’s liquidator, the SQL database contains information about the customers’ portfolios, contact information and transaction histories. Without it, refunding them will be simply impossible, said the company.
The refunding process should have taken at least a couple of months even before this issue, now it may take years as the case moves to the American courts, which are notorious for taking their sweet times with disputes like these.
Naturally, it is beneficial for the Arizona-based company as the longer the dispute continues, the more Cryptopia will be lenient to paying that $2 million in compensation. But the company has firmly stated that it will return the database with legal action and will not crumble under pressure.
All that the previous customers can do is hope that it’s not a Mt.Gox 2.0.