The Cryptopia exchange has been facing difficulties since the exchange was hacked at the start of 2019. Shortly after that, the crypto exchange went into liquidation. At the time of the hack, the exchange reportedly lost 15 percent of all its clients’ holdings.
Crucial victory
Investors and traders of the crypto exchange, which is based in Christchurch, New Zealand, recently won a crucial court case. The hack is considered one of the biggest digital crimes in NZ. It led to the loss of about $30 million in digital assets in which over 9000 digital currencies were stolen.
At the time of the heist, Cryptopia had in its possession around $170 million worth of digital currencies. The digital assets belonged to around 800 thousand crypto holders who had opened an account on Cryptopia.
After the hack, the crypto exchange went into liquidation, which was followed shortly after by a liquidation case at the Christchurch High Court. The lawsuit wanted to clarify whether those who held accounts with Cryptopia were owed the value of the currencies in their accounts or whether the funds were debts, similar to other creditors of the crypto exchange.
In total, the creditors were asking for around $12 million. When Inland Revenue was included, they were owne around $5 million. According to the judgment, the creditors will only receive only about half of what they are owed.
The Judgment
According to the judgment issued by Judge David Gendall, the account holders are entitled to the full refund of what they held at Cryptopia. The judge concluded that digital currencies were property, according to the Schedule of the NZ Companies Act 0of 1993. The reason for this was that the digital assets were held in individual accounts. According to the judge, the argument that crypto is mere information, which precluded it from being property was simplistic and wrong. Consequently, he dismissed it. The judge acknowledged that this was an unusual case. He stated that to the best of his knowledge, this was the first time an issue of such a nature concerning crypto had come before the NZ judicial system.
Investigation Ongoing
Thus far, the liquidators have spent $3 million that was not stolen during the heist. The police are still looking into the theft. However, they have not released any information on the progress of their investigation.
According to a recent local media report, the NZ police were keeping an open mind on who might have instigated the heist. The police are not saying whether it was a local crime, part of an organized crime ring, or part of an international criminal organization.
According to Adam Clark, a co-founder of the exchange, who left a month before it was attacked, the investigation was unique and complex, and it posed several challenges for the police. He added that the reason for this was that the police had not dealt with such an issue in the past.
Cryptopia was established in 2014. At the height of its operations in 2017, it had 100 staff.
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