Cryptopia needs $2M to keep a database alive – or users might never recover their tokens

Cryptopia warned it will take “some months at least” to figure out how to return tokens owed to its users.

Cryptopia administrators have also requested “urgent interim relief,” which they say is critical to maintain a single SQL database that stores all of its users’ individual account holdings and contact details.

Hackers forced Cryptopia offline in January after they drained $16 million in digital assets from its operational wallets. Following a failed relaunch, the exchange finally commenced the liquidation process with Grant Thornton New Zealand earlier this month.

Incredibly, Bloomberg recently reported that liquidators were worried all of its data could be overwritten or lost unless Cryptopia pays an eye-watering $2 million to the company that hosts it, an Arizona-based web services firm.

“This would be potentially catastrophic for the liquidators and account holders,” one liquidator told Bloomberg; the liquidator then confirmed that none of $16 million in tokens stolen had been recovered so far.

Affected users are advised to stay updated with the latest developments via the websites of Cryptopia and Grant Thornton New Zealand.

Update for Cryptopia account holders
27 May 2019

On Friday 24 May 2019, we filed a petition in the Bankruptcy Court in the Southern District of New York (SDNY) seeking recognition of the New Zealand liquidation in the USA, and we also applied for urgent interim relief. We took these steps to preserve the Cryptopia information that is stored and hosted on servers with an Arizona based business.

What does the interim order mean?
The interim order preserves the Cryptopia data, which includes a SQL database containing all account holders’ individual holdings of cryptocurrencies and the account holder contact details. Without this information, reconciling individual holdings with the currencies held by Cryptopia will be impossible.

What happens next?
Our objective is to protect and to preserve those holdings for the benefit of those entitled to them. We are seeking legal advice about our responsibilities in relation to the various currency holdings.

Can I get my tokens back?
We expect that the process of recovering data and determining how to make distributions to account holders will take some months at least. We understand that this delay will be frustrating for account holders. For that reason, we are working to resolve these issues as soon as reasonably practicable.

How do I get information on progress?
We will keep account holders informed of developments through posts to the Grant Thornton New Zealand and Cryptopia websites. A copy of the order from the SDNY Bankruptcy Court can be downloaded here, as directed by that Court.

Press release
15/05/2019

David Ruscoe and Russell Moore from Grant Thornton New Zealand were yesterday appointed liquidators of Cryptopia

Despite the efforts of management to reduce cost and return the business to profitability, it was decided the appointment of liquidators was, in the best interests of customers, staff and other stakeholders.

The liquidators are focused on securing the assets for the benefit of all stakeholders. While this process and investigations take place, trading on the exchange is suspended.

“Given the complexities involved we expect the investigation to take months rather than weeks.”

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.