There has been a lot of talk about cryptocurrency in recent years, with Bitcoin being the obvious industry leader. With the popularity of crypto continuing to rise, there are more and more coin types that come out seemingly every day.Thank you for reading this post, don't forget to subscribe!
One of those is Cryptomania. There is a bit of controversy surrounding the platform, which had a $24 million hack that occurred back in 2019. Backed by Christchurch, trading was initially suspended as action was taken. Part of the issue is with customers of Cryptopia wondering how to get their money back.
What Happened to Cryptopia?
Back in January of 2019, the Christchurch-based exchange Cryptopia experienced a major hack. As a result, the company experienced a major impact in trading on their platform, ultimately halting all trading as the company looked to get through all of the red tape.
It got to be so bad that liquidators were brought in to help work with relevant authorities and independent experts to figure out just what obligations the company may have to its members. The company’s management initially tried to cut costs and get the business back to a model of profitability, but liquidation ultimately was decided to be not only in the best interest of the stakeholders but staff and customers as well.
It is an unfortunate bit of news as the crypto’s shutdown came at a time when there was a major resurgence in trading value. Most of the traders openly wondered if another attack could occur, given how little information the company shared about the initial attack.
After the Hack
If that weren’t bad enough, the company then saw more than $60,000 in cryptocurrency stolen, all this while still being in the liquidation process following the initial $24 million hack. Things continued to spiral downward for the company from there.
The $60,000 theft came in the wake of a revealing story that saw a former employee charged with stealing nearly $250,000 worth of customer data and cryptocurrency during his time there. It was initially known that a cold wallet, which had been dormant since the initial hack, moved $62,000 out of seemingly nowhere.
The company would go into liquidation because of the $24 million hack, which made up roughly 15 percent of the total digital currency stock that Cryptopia clients possessed. Cryptomania became one of the more popular exchanges for niche coins, given that it had more than 900 different cryptocurrencies.
Liquidators have since gone to the High Court in Christchurch to ask for guidance. They were looking to determine whether the account holders in question were entitled to any and all of the currencies in their accounts or if the funds were considered debts that would be then ranked alongside the other creditors.
What Cryptopia Owed?
In all, creditors were claiming to be owed roughly $12 million. That includes roughly $5 million that is owed to Inland Revenue. The decision would ultimately see account owners get half of what they were owed back.
It has since been a long, drawn-out process for the formerly growing cryptocurrency exchange. It just goes to show that even with this new vaunted technology, things can still go wrong depending on who is in charge.
Account holders with the exchange are left holding the bag of sorts, only getting about half of what they had in their wallets back. For some, that is a minor loss to take. For others, it can mean thousands upon thousands of dollars in losses that they definitely did not see coming.
Ultimately, the entire chain of events comes as a shock for multiple reasons. Exchanges under blockchain technology are thought to be largely safe. The hack goes to show that a major exchange can be compromised at any time.
It also goes to show that even further issues can arise even with legislators and liquidators in the mix. The second $62,000 hack came amidst the investigation into the initial hack. No one seemed to know why funds were moved out of a dormant wallet, and it just underlined the glaring lack of security that had been evident from the start of the case, all of which has resulted in frustration for customers of the exchange.
Cryptopia: How to Get Money Back?
After nearly two years, users of Cryptomania may finally be able to get their money back. The Cryptopia coinmarketcap, estimated to be roughly $100 million at the time of the company’s liquidation, may be available to those with holdings through a claim.
The process is believed to be relatively simple, though the results are definitely not guaranteed. A request can be made with the customer support team to freeze your account so no more transactions can happen.
Users need to have their account verified through the exchange, followed up by filling out a form and attaching the requested documents. From there, it takes a little bit of time, but most users have been able to get their funds out of the exchange.
Given the ruling by liquidators during the process, the company is only obligated to return about half of the user’s funds to them. In some cases, they have given users back their whole wallets, but there is nothing much in the way of guarantees regarding that.
Though cryptocurrency continues to grow in popularity, this is a glaring example of there being no sure thing. Despite having $100 million in assets at the time of their liquidation, a major compromise wound up taking down the seemingly growing Cryptopia coinmarketcap.
The lesson, as always, is to keep up with news and information on any exchange or service that you use. You never know when a hack can occur, which has the potential to derail even a seemingly strong coin exchange.