- Cryptopia is still undergoing liquidation proceedings but has released the first report from Grant Thornton.
- Presently, the actual amount that will be owed to creditors is officially unknown.
The Cryptopia hack of January this year has ultimately led Cryptopia to file for bankruptcy, a decision made by the stakeholders. Proceedings have already begun, and the liquidators of the exchange have released their first of many reports to the public to discuss the current financial situation of Cryptopia. This report states that the creditors are presently owed $2.738 million, according to Grant Thornton, the liquidation team.
At this point, the liquidators are far under reaching that amount, having only secured $912,000. These liquidators are expecting a deficit of $1.63 million for secured creditors, which include Dell NZ and Coca Cola Amatil (NZ).
At the firm, staff members are presently owed $207,000 for the salaries and holiday pay that they did not received. They are also owed $177,000 for unsecured debt, though Grant Thornton believes that the latter amount will end up rising.
— Cryptopia Exchange (@Cryptopia_NZ) May 31, 2019
For anyone that needs to refresh their memory, Cryptopia was the victim of a massive hack that came with “significant losses.” After the hack, a blockchain analytics firm evaluated the losses, discovering approximately $16 million in ether and ERC-20 tokens. The company attempted to restart their trading services in March, despite continued banking problems, but this path led them straight to liquidation and stopped trading operations again.
Even with the relaunch of trading services, the company did not have the volumes that they needed for their debts.
At that point, the liquidators report said it became necessary to appoint a firm to handle the ongoing proceedings. Grant Thornton filed bankruptcy protection this week so that the data was stored on servers with a firm in Arizona as the liquidators determine which creditors get which amount.
At this point, the liquidators have not determined how much is actually owed to the customers. In a statement, Grant Thornton explained:
“We are currently gaining access to the database to undertake a reconciliation of the holdings against the customer balances. Until the user balance database is reconciled with the crypto-asset wallets operated by the company, we cannot confirm the value of Customer holdings.”
When the company was liquidated, there was $691,229 accounted for on the exchange in cash, accompanied by a loan of approximately $150,000.
The fixed assets were valued at over $1.3 million, though it is likely that only $242,000 will actually be recoverable. When the company filed for liquidation, the tax authority in New Zealand was in the middle of an audit, so the taxes that the exchange is responsible for is unknown as well.
The efforts to recover the lost cryptocurrency value is being supported by the local police, as well as former staff of Cryptopia. The report added:
“This involves gaining access to the company’s crypto-assets wallets and transferring them to secure cold storage where available.”
The company added that they “are aware of and understand” why the customers from Cryptopia are becoming agitated. However, considering that the case is based in New Zealand, which has no legal precedent regarding crypto assets right now, regaining these funds will need “significant direction” from the local courts.
The full report on the current state of the liquidation process can be viewed at https://t.co/h2fZvVBL1A.
Like what you read? Give us one like or share it to your friends