Cryptopia Seeks Bankruptcy Protection in the United States
Cryptopia, the New Zealand-based cryptocurrency exchange that fell victim to a hack earlier this year and subsequently went into liquidation, has taken a significant step by filing for bankruptcy protection in the United States. The exchange, which had over 300,000 accounts from around the world, has appointed Grant Thornton to handle the preservation of crucial data stored on servers managed by an Arizona-based firm.
Emergency Motion Granted by Bankruptcy Court
The bankruptcy court in the Southern District of New York issued an order to Cryptopia on Friday, granting an emergency motion for provisional relief until June 7. However, the Arizona company responsible for managing the servers has cut ties with Cryptopia and is now requesting $2 million in payment. If Cryptopia fails to meet this demand, there is a risk that the data could be overwritten or lost, according to reports by Bloomberg.
Challenges Faced by Cryptopia
The exchange faced a major setback earlier this year when hackers stole over $16 million from its platform. As a result, every account holder has become a potential creditor in the liquidation process, with trade creditors being owed approximately $2.6 million. Grant Thornton emphasized the importance of preserving the Cryptopia data, as it contains a SQL database with details of account holders’ cryptocurrency holdings and contact information.
Efforts to Protect User Data
In a statement on its website, Cryptopia outlined its efforts to protect and preserve user holdings for the benefit of those entitled to them. The exchange acknowledged the frustration that account holders may experience due to the delay in data recovery and distribution processes, which are expected to take several months to complete. All trading activities on the Cryptopia platform have been suspended, preventing users from depositing or withdrawing their crypto assets.
Despite the challenges faced by Cryptopia, the exchange remains committed to resolving the issues at hand as promptly as possible to ensure a fair and transparent process for its users.