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Hack Kills Cryptopia - Liquidators Take Charge of Exchange

Hack Kills Cryptopia - Liquidators Take Charge of Exchange 101
Source: iStock/claudiodivizia

A New Zealand court has placed hacked cryptocurrency exchange Cryptopia into liquidation following a number of failed attempts at re-opening the platform.

The court placed responsibility for the liquidation in the hands of David Ruscoe and Russell Moore, employees at auditor Grant Thornton, following a devastating hack in mid-January this year. In February, the company said that "worst case 9.4% of our total holdings was stolen."

Per a company statement, Ruscoe stated that a “thorough investigation” was already being planned in conjunction with Cryptopia’s management and shareholders, in order “to find the solution that is in the best interests of customers and stakeholders.”

However, Ruscoe warned, "Given the complexities involved we expect the investigation to take months rather than weeks.”

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Cryptopia also announced the liquidator’s appointment on its official Twitter account – where the news was met with derision and a number of angry responses among supportive replies.

The liquidator says it will publish an initial report on the New Zealand Companies Office website next week.

Grant Thornton confirmed that New Zealand police officers are “continuing to investigate the unauthorized transfer” that brought the platform to its knees.

The auditing firm also noted,

“The liquidators are also working with independent experts and the relevant authorities with regards to the company’s obligations. Grant Thornton will be contacting all customers and suppliers about its appointment in the next few days.”

Twitter users took to the platform to express their dismay, with one lamenting that “regulatory overreach” would probably follow Cryptopia’s ultimate demise.

Rob Dawson and Adam Clark founded Cryptopia three years ago. According to Stuff, a local news outlet, the exchange has more than 1.4 million users, while the exchange itself says it has more than 2 million users. Dawson's father, Pete Dawson, is now the sole director and a 5% shareholder of the company, the report said, adding that Cryptopia has 90 shareholders in total, while Clark, Rob Dawson and Intranel Consulting own 30%, 27% and 26% stakes respectively.

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