Hacked Cryptopia Exchange Moves to Second Stage in Claims Processing

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In Brief
  • The former New Zealand-based crypto exchange announced the beginning of the second stage of its claims process.

  • This stage will focus on the identity verification of affected users.

  • The update comes just a few months after an ex-employee pled guilty to stealing $250,000 worth of funds during the liquidation process.

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Cryptopia, the New Zealand-based crypto exchange that suffered a massive multi-million dollar hack in May of 2019, announced to users that “Stage 2” of the liquidation process has commenced. This stage, which followed the registration of claims, deals with the identity verification of claimants. 

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The Tweet reads in a manner that assumes the process will go forward by region: “Account holders should expect to receive an invitation email to login into the claims portal when their country is ready for verification.”

However, on the website, which posts official updates on the liquidation process, the last official notice came from June of 2021. This notice clarifies the next official statuary update is set to be released in December of this year. 

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As of June 2021, over 55,000 users had completed the claims registration step. This was the first step required by former users of the Cryptopia exchange for regaining funds. The process further entails much bureaucratic red tape from the court system in New Zealand. 

Cryptopia dystopia 

This announcement comes almost two years into the process of liquidation and returning of clients’ assets. The company started liquidation in December of 2019 with an unknown repayment date after the platform was hacked. Cryptopia had over 900,000 global users, some of which battled in court for their assets to be classified as “property.” The liquidation process is a result of court success on behalf of the clients. 

While the repayment date still remains unknown, the company has a four-stage plan. The claims registration process, “Stage 1” began in December 2020.

The situation was made worse when a former employee stole nearly $250,000 in cryptocurrencies during the liquidation process by making unauthorized copies of customer wallet keys. This employee pled guilty to charges in New Zealand courts in July of this year and is expected to be sentenced sometime this month.

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Savannah Fortis is a multimedia journalist covering stories at the intersection culture, international relations, and technology. Through her travels she was introduced to the crypto-community back in 2017 and has been interacting with the space since.

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