First liquidators’ report on Cryptopia released today

31 May 2019

The liquidators for Christchurch-based crypto exchange, Cryptopia released their first report into the company’s affairs today. A copy of the report can be found here.

Liquidators David Ruscoe and Russell Moore have taken steps to secure the company’s assets and have filed a petition in the Bankruptcy Court in the Southern District of New York to preserve the Cryptopia information stored on servers in the US.

The liquidators are continuing the process, begun before the company was placed in liquidation, of recovering crypto-assets compromised from the hack of Cryptopia’s exchange.

The liquidators, this week gained a Court Order from the New Zealand Courts allowing them to utilise certain crypto-assets to recover, preserve and protect assets. At this stage of the investigation the liquidators cannot estimate a date for when the liquidation will be completed. “As liquidators we have a responsibility to protect and preserve crypto-asset holdings for the benefit of those entitled to them,” says Mr Moore. “We are aware of and understand the frustration of Cryptopia’s customers. As there is no legal precedent on crypto assets in New Zealand and worldwide, the distribution of those assets and the overall conduct of the liquidation will require significant direction from the New Zealand Courts.” There will be no further comment from the liquidators at this stage.

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.