Users of the New Zealand-based bitcoin exchange Cryptopia have yet another disappointment in their hands. Following the announcement of liquidation, an update recently states that Cryptopia has warned users that they may not get all their funds back.
Cryptopia says this is due to an ongoing investigation to determine
‘the amounts owing and available to return to customers’ and they cannot give clients any guarantees that they will get all their funds back:
This leaves all the customers hanging and leaving them with no choice but to wait and hope that they might get at least half of their funds.
Strike 2 for Cryptopia Users
According to Cryptopia, this investigation process is nothing but tedious, complex and can involve the New Zealand Courts. The time frame of the investigation is expected to be months. The exchange has frozen all the transactions leaving users to suspect the whole thing to be an inside job.
Cryptopia has recently disclosed that ‘the hack earlier this year contributed to the issues which led to the liquidation’. The projected loss to the hack is Cryptocurrencies worth approximately $15 million (NZD$23 million). They trace this back to a security breach five months ago. What makes matters worse is that freezing of all crypto assets is not just limited to the users impacted by the hack but also every other user that uses the exchange. None of the users will be able to check their balance until the investigation is over.
Altcoins Face the Heat
Majority of Cryptopia users comprised of Altcoin altcoin enthusiasts since owing to its extensive portfolio. Anyhow, Cryptopia boasted approximately 1.4 million users and around 457 coins. They are no more and these users will now have to look elsewhere as the exchange has no plans to get back in the game.
Sudden liquidation of Crypto exchanges like these is a concern for long term crypto enthusiasts as there is no guarantee they will get back any of their owned digital assets. Just following the exchange announcing that it was going into liquidation, Bitcoin had just hit the yearly high above $8,000. Now, it has dropped nearly 10 percent to trade just below $7,300.Now all the users can do is to hope that the market doesn’t crash leaving them to more losses.
In case you are wondering how to stay safe amongst the involatile crypto environment, Here’s a video on how to keep your Cryptocurrencies safe:
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