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Cryptopia to reimburse victims of $18 million hack

Photo of: Nathan VDH
by Nathan VDH

On January 15, 2019, the New Zealand Cryptopia stock exchange lost nearly $18 million in cryptocurrencies in a high-profile hack. However, good news is on the horizon for the victims. Compensation should be in place by December 2020.

Cryptopia’s exchange platform has never really recovered from its significant hacking. Although the Cryptopia stock exchange attempted to reopen in March 2019, barely two months later (in May), it went into permanent liquidation.

The business consulting firm, Grant Thornton, has been working on the case ever since and intends to distribute the remains of the defunct exchange.

In an update published on September 18, the consulting firm explains that “further progress has been made in the liquidation”.

The claims registration process should be in place by Grant Thornton by the end of this year 2020.

KYC mandatory, but reimbursement in cryptos

In the rest of its press release, Grant Thornton allows a question-and-answer session to anticipate claims from aggrieved Cryptopia users.

For example, to the question “Will an identity verification (KYC) be required? “the answer is clear for those who would have preferred to remain discreet:

“The KYC process cannot be avoided, as it is a legal requirement in New Zealand. (…) Please note that customers who have already gone through the KYC process with Cryptopia will still need to follow the procedure we have established. »

However, Cryptopia’s 960,000 users will be happy to know that their cryptocurrencies will not be liquidated into cash :

“The Court’s instructions state that the reimbursement of customer assets should be made, as far as possible, in crypto-assets. »

This will also have the merit of avoiding mass liquidations of cryptos, as we have unfortunately seen with the Japanese liquidators of MtGox. This fear alone had succeeded in generating a downward movement in the price of Bitcoin.

The next Grant Thornton report is due to be published in December 2020. By then, precise instructions for claiming compensation should already have been communicated to Cryptopia’s unfortunate clients.

This is good news for Cryptopia users but also for Bitcoin in general as this news story has been a stain on the crypto market for a while.