Cryptopia hack updates

On January 14th the New Zealand cryptocurrency exchange Cryptopia suffered a major security breach. We will post the Cryptopia hack updates here, as and when we receive them.

Cryptopia Hack updates 21-08-2019

The Cryptopia hack left a lot of people severely out of pocket but since our last update they are getting closer to resolution. This process will be a long and drawn out one, but will hopefully eventually lead to many receiving most, if not all, of their outstanding cryptos and balances. (Note, we do advise keeping as much of your crypto off of exchanges, please check our article on Cryptocurrency storage solutions)

Updated: 31/05/2019

New Zealand based Grant Thornton have been tasked with the liquidation of the Cryptopia assets, and their initial report can be found in pdf form here

Update for Cryptopia account holders 20 August 2019 from Grant Thornton:

We have made good progress towards securing and preserving Cryptopia crypto-asset holdings for the benefit of those entitled to them. Below is an outline of the progress we have made since our last update on 3 July 2019.

Securing assets

We now have possession of Cryptopia data that was stored by a third-party data centre in the United States, and since the last update have been successful in accessing that data. This is a very pleasing step towards determining customer holdings, as the data contained the only records of Cryptopia’s customer holdings and certain crypto-assets were only stored on these servers.

As mentioned previously, we are now moving the crypto-assets which we have taken possession of, into a “safe non-hacked environment”. We are doing this as a precaution as the source of the January 2019 hack has not yet been determined.

The process was commenced by Cryptopia prior to Liquidation and is necessary to ensure that the data does not corrupt crypto-assets and other data which were not subject to the hack.

We also continue to work with the New Zealand Police and other authorities internationally in respect of the work they are doing to determine the source of the January hack.

Determining customer holdings

We appreciate that customers are wondering why it is taking so long for us to determine customer holdings. There are two main reasons for the time and complexity of the process:

1. Customers did not have individual wallets and it is impossible to determine individual ownership using just the keys in the wallets.
   While Cryptopia held details of customer holdings and reported these on the Exchange, the crypto-assets themselves were pooled (co-mingled) in coin wallets. As a centralised exchange, users’ trades would occur in the exchange’s internal ledger without confirmation on the blockchain.
2. No detailed reconciliation process between the customer databases and the crypto-assets held in the wallets has ever been completed.
   To determine each customer’s holdings we must undertake a manual process to determine what is held in the pooled wallets and then reconcile the information with that held in the customer database. We are hopeful this process will show us the holdings of individual account holders. This process is well underway but will still take some time to complete. We are working to reconcile the accounts of over 900,000 customers, many holding multiple crypto-assets, millions of transactions and over 400 different crypto-assets). These must be reconciled one-by-one.

Hacked assets

We are still determining how we can, or if we can, recover crypto-assets that were hacked in January 2019. This is a complex situation with cooperation needed from third parties.

What happens next

While our reconciliation process is progressing well, we still require direction from the New Zealand Courts before we can return crypto-assets to customers. The information outlining the legal process included in the last communication are still current and is below.

We continue to liaise with our legal advisors as to the legal status of crypto-assets, the legal relationship between Cryptopia and its customers and to determine how crypto-assets could be returned to customers. However, due to the January hack, this is a complex and time-consuming process.  For example, an Exchange that has been hacked cannot simply be reopened. We have certain legal requirements and obligations both in New Zealand and internationally that liquidators must meet, such as Anti Money Laundering/Know Your Client (AML/KYC) requirements when considering any repayment or return of assets.

The KYC process cannot be avoided, it is a legal requirement in New Zealand, and prior to returning crypto-assets we will correspond with customers as to how this process will be completed. Please note, customers who have previously completed the KYC process with Cryptopia will still need to go through the process set by us.

Where to go for updates

We appreciate you want to be advised regarding our progress on the Cryptopia liquidation. We will continue to update you as further information comes to hand.

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As you can see from the statement from Grant Thornton the liquidation process is a very complex one. Hand picking through every single account and transaction is required, and KYC and AML procedures are needed, but they intend to trace as many as possible to ensure correct liquidation.

Cryptopia hack update March 4th 2019

We have been tracking and updating the situation surrounding the hacking of the New Zealand based cryptocurrency exchange since the news broke. Today we are updating with a significant number of tweets from Cryptopia themselves:

Update: The police have now given us access back to our building, while they continue their investigations. Our staff are working relentlessly to evaluate the funds that were stolen.

— Cryptopia Exchange (@Cryptopia_NZ) February 14, 2019

Update:
We are continuing to work on assessing the impact incurred as a result of the hack in January. Currently, we have calculated that worst case 9.4% of our total holdings was stolen. Please keep an eye on our page for further updates today.

— Cryptopia Exchange (@Cryptopia_NZ) February 27, 2019

Update: We are securing each wallet individually to ensure the exchange is fully secure when we resume trading.
We have more updates to come today, please keep an eye on our page.

— Cryptopia Exchange (@Cryptopia_NZ) February 27, 2019

Update: As a result of the new wallets please immediately refrain from depositing funds into old Cryptopia addresses.
We have more updates to come tomorrow, keep an eye on our page.

— Cryptopia Exchange (@Cryptopia_NZ) February 27, 2019

Further to our news yesterday, we are pleased to announce the return of our both our founders Adam Clark & Rob Dawson back into Cryptopia, their focus will be to set a clear strategic direction moving forwards. More updates to come.

— Cryptopia Exchange (@Cryptopia_NZ) February 27, 2019

Update: We are aiming to have the Cryptopia site re-opened as read only by Monday.

— Cryptopia Exchange (@Cryptopia_NZ) February 28, 2019

Update: We have transitioned 24% of all wallets to our new secure servers. Once the read only site is online, we will be keeping users up to date on which wallets have been checked and secured via the coin info page.

— Cryptopia Exchange (@Cryptopia_NZ) March 1, 2019

Update: We were aiming to get the site live today however, we have had a slight delay and are aiming to have the site live tomorrow. We will keep you updated as this progresses.

— Cryptopia Exchange (@Cryptopia_NZ) March 4, 2019

Cryptopia exchange hacked

The initial statement is still available on the home page of their website:

Important Announcement

14th January 2019, the Cryptopia Exchange suffered a security breach which resulted in significant losses. Once identified, the exchange was put into maintenance while we assessed damages.

Cryptopia has notified and is cooperating with the appropriate government agencies, including the NZ Police and High Tech Crimes Unit. 

The New Zealand Police and Special crimes Unit released the following statement:

Tuesday, 15 January 2019 – 9:50pm

Police were advised late yesterday of an issue involving potential un-authorised transaction activity at the Christchurch based crypto-currency trading company Cryptopia. 
 
A significant value of crypto-currency may be involved and Police are taking this very seriously.
 
We are currently talking to the company to gain a further understanding of what has occurred.
 
A dedicated investigation team is being established in Christchurch including specialist police staff with expertise in this area.
 
Police are also liaising with relevant partner agencies in New Zealand and overseas.
 
The investigation is still in its very early stages and police are unable to provide further information tonight
 
We expect to provide an update tomorrow. 
 
ENDS
 
Issued by Police Media Centre. 

Cryptopia hack updates

With the main website being in maintenance mode, the Cryptopia hack updates have been added to their initial tweet thread

pic.twitter.com/0ZwqFfwwHi

— Cryptopia Exchange (@Cryptopia_NZ) January 15, 2019

The New Zealand Police have issued a first cryptopia hack update  on their website, :

Wednesday, 16 January 2019 – 7:30pm

The investigation into the alleged unauthorised transaction of cryptocurrency at the Christchurch company Cryptopia has continued today.
 
The inquiry is still in its very early stages and police are continuing to work with Cryptopia to establish what has happened and how.
 
Police are not yet in a position to say how much cryptocurrency is involved, other than it is a significant amount.
 
A large team, including Canterbury CIB and specialist staff from the police High Tech Crime Unit, have been assigned to the case.
 
There has been a visible police presence at the company’s Colombo Street headquarters throughout the day as police take the steps needed to progress the investigation. 
 
While police are unable to go into details about specific steps being taken at this stage, we can say that our focus includes commencing both a forensic digital investigation of the company, and a physical scene examination at the building.
 
We are dealing with a complex situation and we are unable to put a timeframe on how long the investigation may take.
 
We are also aware of speculation in the online community about what might have occurred.  It is too early for us to draw any conclusions and Police will keep an open mind on all possibilities while we gather the information we need.  
 
A priority for police is to identify and, if possible, recover missing funds for Cryptopia customers; however there are likely to be many challenges to achieving this. 
 
We would also like to make clear that Cryptopia are cooperating fully with the investigation team and a media report that police ‘stormed’ the building today is entirely incorrect. 
 
Anyone with information which could assist the investigation can contact police by email 
 
ENDS

Issued by Police Media Centre.

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Statement from NZ police 22/01/2019:

Related news on Cryptopia hack updates:

The CEO of Binance was alerted in a tweet to the fact that the hackers had transferred some of the stolen funds to Binance accounts. His response was excellent, and another sign of the pro-active approach he holds high.

Just checked, we were able to freeze some of the funds. I don't understand why the hackers keep sending to Binance. Social media will be pretty fast to report it, and we will freeze it. It's a high risk maneuver for them. https://t.co/i0PeahLzic

— CZ ???? BNB (@cz_binance) January 16, 2019

Relevant news