There have been several attacks on cryptocurrency exchanges, and the attack on New Zealand-based cryptocurrency exchange Cryptopia, last year, was one of the biggest attacks in recent times. The hackers crippled the platform as it went into liquidation and got away with $16 million in funds.
However, judgment made by Justice David Gendall at the High Court in Christchurch found in favor of the account holders. As a result, the creditors were set to receive half of their lost funds from Cryptopia.
According to a recent announcement from accounting firm Grant Thornton, the liquidator of the exchange, Cryptopia has stated that it expects to open the claims registration process by the end of 2020.
“The expectation is the claims process will open by the end of the year with the [anti-money laundering process] to follow this. Once these two phases are complete, we expect the repatriation process to follow,” the announcement said.
Hence, the firm has prepared a procedure for its customer to file the claim. All claimers need to verify their accounts and other data on an exclusive portal before Grant Thornton can proceed with the disbursement process.
“We cannot re-open the exchange to return account holders’ coins. The exchange was hacked and the source of the hack is still unknown and is still being investigated by the New Zealand Police,” the announcement added.
A long process for Cryptopia Victims
To avoid further risks, Cryptopia had re-secured all of the coins in “a non-hacked environment” before the reconciliation process was initiated.
The accounting firm added that in order to be eligible for the claim, customers will have to comply with another know-your-customer procedure as a legal requirement in New Zealand, despite the fact that they had already done so with the exchange.
Furthermore, customers whose funds weren’t affected won’t be granted access to their funds right away. The firm clarified:
“Because no detailed reconciliation process between the customer database and the crypto assets held in the exchange’s wallets was ever undertaken, we cannot confirm that account holders’ coin balances will match the actual holdings for each coin.”
The process is being funded by company assets and “allocation of costs of returning account holders assets will be subject to further direction from the Court.”
Meanwhile, the attackers still remain at large, but many suspect that this was an inside job.