• Cryptopia filed for bankruptcy after not being able to sustain business
• The exchange has filed for an interim order that helps preserve all the data that is currently possessed by a third-party Arizona based business
• The entire data retrieval process may take up to a month
• Users can stay updated about further developments through the Grant Thornton New Zealand and Cryptopia websites

Exchange hacks are becoming a sad staple of the emerging crypto market. Even the best of exchanges like Binance are falling prey to the notorious hackers who are getting away with millions of dollars’ worth of Cryptocurrencies. Cryptopia, a New Zealand based cryptocurrency exchange and trading venue was hacked on January 14th, 2019. The hackers reportedly stole around $16 million worth of Ethereum from over 76,000 accounts. The heist was thought to be executed by someone on the inside said a New Zealand police report. The institution was hacked a second time again with hackers managing to get away with 1675 Ethereum this time.

Cryptopia woefully underprepared to safeguard funds and data

With a user base of 300,000, the operators had been running the exchange without a proper database or security for their consumer’s confidential data. This was a very poor way of running an exchange of this magnitude with all the hacks that have been taking place. The January hack was followed by a false report that stated the estimated worth of lost funds to $2.5 million which was later discovered to be a massive underestimate. All these unethical ways of running the business resulted in the institution filing for bankruptcy after the operators were not able to sustain the business any longer.

User data held hostage

The company tried re-launching the exchange by asking users to cancel all orders but in vain. The company filed for bankruptcy earlier this month. Liquidators have been trying to collect and redistribute funds ever since. The Company has also lost all access to all the user data that was in a database hosted by a third party company based in Arizona. The company is demanding $2 million from the exchange and has terminated all agreements between the parties. Until the amount is paid in full liquidators are unable to access any data that is required to deduce the digital assets their users hold. All this data now faces the risk of being overwritten and lost.

Users face slim odds of recovering their assets

The exchange opened its doors to all its users back in March so that everyone could trade-off their digital assets for Bitcoin, Litecoin or Dogecoin but the shareholders decided to flatline according to the declaration filed. It is reported that the firm still has millions of dollars’ worth of digital assets. Every Cryptopia user is a creditor in the liquidation process and trade creditors are owed $2.6 million according to the official document. Recent reports stated that the company has filed for interim relief. The interim order preserves all the Cryptopia data that is currently possessed by the Arizona based business. The data 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 report states.

The company states that they are taking proper steps to ensure that the holdings are preserved for all those entitled to them. The process is expected to be a months-long endeavor; the account holders will, however, be able to keep track of further developments through the Grant Thornton New Zealand and Cryptopia websites. The hackers have recently moved the stolen Ether between various addresses and steps are being taken to recover the funds.