Cryptopia’s trouble it seems is far from over. The New Zealand-based cryptocurrency exchange that suffered a hack back in January 2019 and is now in the process of declaring bankruptcy has come under threat from an Arizona company looking to terminate its business with the beleaguered exchange.
Such a move could scupper any hopes for a successful liquidation process further throwing the company into chaos. Cryptopia is the latest exchange platform in the industry to become defunct following an attack by hackers.
Arizona Company Could Delete Cryptopia Customer Records
According to Bloomberg, Cryptopia’s customer records were stored on servers belonging to a firm in Arizona. Reports indicate that the company is threatening to delete these records if not compensated to the tune of $2 million.
The company in question says it wants to terminate its agreement with the Cryptopia. Liquidators fear that inability to meet the company’s demands could prevent the liquidation process as the deleted information might be lost forever.
Attempts to Safeguard Cryptopia Customer Information
Grant Thornton, the company in charge of the liquidation process, on Monday (May 27, 2019) released an update stating that steps have been taken to ensure that customers’ data stored and hosted on serves with an Arizona-based company are safe.
According to the publication, the safety steps included filing for bankruptcy protection in a New York Bankruptcy Court an application for urgent interim relief.
Further explaining what the “interim order” meant for customers, the publication states:
“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.”
The liquidators also add that users would have to wait some months for the data recovery process and refunds and adds that steps are in place to resolve pending issues.
Final Curtain Call for Another Bitcoin Exchange
It seems Cryptopia has reached the end of the road, joining the likes of Mt. Gox and QuadrigaCX as defunct Bitcoin exchanges. The platform which began in 2014 hasn’t been able to recover from the hack it suffered in early 2019.
After an initial investigation from the police in New Zealand, the platform was given the all-clear. It resumed with a read-only version of its website but never truly got off the ground again.
Earlier in May 2019, Blockonomi reported that the company was going into liquidation with Grant Thornton appointed to oversee the process. Several reports at the time indicated that the exchange’s physical location in Christchurch had become a ghost town.
The risks associated with cryptocurrency exchanges cannot be over-emphasized and experts have constantly warned traders and investors to be careful. Cryptopia is not the first exchange to run out of business, and may not be the last.
Canadian cryptocurrency exchange, QuadrigaCX, is also struggling to pay customers, after the demise of its CEO, Gerald Cotton. For QuadrigaCX, however, the situation is dicey, as the CEO died without leaving the keys of the cold wallets behind, thereby trapping users’ funds.
The platform went ahead to apply for creditor protection in the Nova Scotia Supreme Court and was later advised to apply for bankruptcy.
Also, now defunct bitcoin exchange, Mt. Gox., suffered a massive hack back in 2014 and is currently undergoing a rehabilitation program to settle affected users.
Blockonomi earlier reported that reports by CipherTrace reveal that the cryptocurrency sector lost nearly $2 billion worth of bitcoin and other virtual currencies to cybercriminals.
