Cryptopia: Claims process begins in embattled exchange’s liquidation

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Account holders with defunct digital currency exchange Cryptopia are a step closer to recovering some of their money, with the launch of the formal claims process in liquidation.

Liquidators Grant Thornton announced that creditors were now able to log claims via the Cryptopia claims portal, inviting those still owed money since the firm collapsed to register their interest.

The New Zealand-based exchange was the victims of a hacking attack in early 2019, leading to losses of over $16 million. As a result, Cryptopia was forced to suspend all services, and ultimately to begin the process of liquidation. According to Grant Thornton, Cryptopia still owes $4.2 million to creditors affected by the hack.

In July 2020, one creditor filed a notice with courts over the failure of liquidators to comply with their legal duties, indicating that a lawsuit may still be in the cards. Other victims are reported to be considering their options, as the liquidators eye up potential settlements for creditors.

The claims process is only open to verified account holders, who will be required to submit account details alongside the registration of their claim.

Grant Thornton said it would continue sending emails to affected creditors over this week, a process that is expected to run for several more days due to the sheer volume of pending claims against the exchange.

The demise of Cryptopia shows the threat posed by hacking attacks, particularly for those holding funds with crypto exchanges. Exchange hacks have historically had a devastating impact on digital currency investors, often finding themselves significantly out of pocket as a result of thefts from cryptocurrency exchanges.

The liquidation process will now prioritize claims from creditors, with investors likely to receive only a fraction of the funds stolen in the attack.

See also: CoinGeek Live presentation, Custody Changes Everything: How BSV Opens a New World for Digital Asset Custodians