New Zealand: Cryptopia Seeks to Preserve User Account Data Amid new Challenges

Accounting firm Grant Thornton LLC on May 27, 2019, provided an update regarding the petition for bankruptcy filed by the now-defunct cryptocurrency exchange Cryptopia. The company said that it is working towards preserving the exchange’s users’ data stored and hosted on the servers of a U.S.-based firm.

Cryptopia Falling Hard

According to sources close to the matter, New Zealand-based cryptocurrency exchange Cryptopia Ltd. on May 24, 2019, filed a petition in the Bankruptcy Court in the Southern District of New York (SDNY) to obtain legal recognition of the company’s liquidation in the U.S.

Notably, the exchange had also applied for “urgent interim relief,” which essentially prevents the Arizona-based business from wiping off data pertaining to Cryptopia exchange. Currently, commentators have indicated that the Arizona server company is looking to terminate its contract with Cryptopia besides an additional demand of $2 million from the beleaguered exchange.

Reportedly, the server company currently hosts a SQL database which comprises of all Cryptopia account users’ cryptocurrency holdings and their contact details. Without such data, reconciling the actual individual crypto holdings with the digital assets help by Cryptopia will be impossible, Grant Thornton said.

The liquidator is concerned that if they don’t pay the Arizona company, Cryptopia’s data could be overwritten or lost, which would make it near impossible to settle the exchange’s stakeholders’ claims.

The company added:

“Our objective is to protect and to preserve those holdings for the benefit of those entitled to them. We are seeking legal advice about our responsibilities in relation to the various currency holdings.”

Further, the accounting firm noted that the process of recovering data and ascertaining a proper way to distribute the exchange’s assets among the account holders “will take some months at least.”

Cryptopia Refreshes Concerns about Exchange Safety

Hacked in January 2019, Kiwi exchange Cryptopia was just the first of several cryptocurrency exchanges that fell prey to cybercriminals in the coming months.

In South Korea, Bithumb exchange got hacked in April 2019 which saw thieves steal EOS and XRP cryptocurrencies worth millions of dollars.

On a more recent note, on May 8, 2019, one of the world’s largest cryptocurrency exchanges by reported volume, Binance, succumbed to a well-orchestrated hack attack which resulted in the loss of bitcoin worth $40 million at the time.