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Cryptopia liquidation process recovers $7.2 million

Cryptopia liquidation process recovers million

Cryptopia liquidation was a sigh of relief for the regulators and investors alike. The liquidator of the defunct Cryptopia exchange has successfully retrieved around seven million dollars ($7.2M). New Zealand based cryptocurrency exchange Cryptopia suffered a hack where the alleged hackers stole sixteen million dollars ($16M). Later, the exchange was put under liquidation by the authorities.

Grant Thornton, the accounting firm assigned by the state authorities, revealed that salvaged assets were retrieved during the Cyrptopia liquidation process. The breakdown of the assets came around the seven million dollars ($7.2M) mark. Also, the report published by the firm mentions about some of the challenges it faced during the liquidation.

Cyrptopia liquidation report details whatever is left

A detailed breakdown of the assets as mentioned in the Cryptopia liquidation report. The sale of physical assets including hardware equipment and furniture delivered two hundred thousand dollars ($200K), three hundred forty-four (344) bitcoins yielded around four and a half million ($4.4M) while a third party trust fund contributed five million dollars ($5M). The expenses on liquidation were deducted from these recoveries which amounted to around four million dollars ($3.7M). After all the deductions, recovery figure stood approximately seven million dollars ($7.2M) which were available for refund to the exchange’s users.

Now, the recovery process will start that will involve refunding the money to the users. The firm will identify the users eligible for the refund as per their respective holdings. With more than nine hundred thousand (900K) active members, it will surely be a lengthy time. Besides the millions of transactions, the liquidator also needs to assess multiple crypto-assets.

Challenges in Cryptopia liquidation

Grant Thornton explains that it is facing a challenge in identifying the users and their actual assets. That is primarily because the assets were stored in general wallets instead of individual user wallets. Even though the exchange shared details about every customer’s holdings, they were all pooled in general coin wallets.

Being centralised in nature, Cryptopia conducted the trades of its users on the internal ledger of the exchange. This has compounded the liquidator’s problems when it comes to accountability of user assets. Furthermore, the legal status of crypto assets in New Zealand is also a concern for the liquidator.

Image Source: Pixabay

Gurpreet Thind

Gurpreet Thind

Gurpreet Thind is pursuing Masters in Electrical Engineering at University of Ottawa. His scholarly interests include IT, computer languages and cryptocurrencies. With a special interest in blockchain powered architectures, he seeks to explore the societal impact of digital currencies as finance of the future. He is passionate about learning new languages, cultures and social media.

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