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Former employee allegedly stole almost $250k worth of cryptocurrency from Cryptopia

By November 3, 2020 No Comments

Cryptopia went into liquidation in May last year after a $24 million hack.

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Cryptopia went into liquidation in May last year after a $24 million hack.

A former employee has been charged with stealing almost $250,000 worth of cryptocurrencies from international currency exchange Cryptopia, in what police say is unrelated to a $24 million hack.

The man, who has interim name suppression, is charged with theft by a person in a special relationship and theft over $1000.

A police spokeswoman confirmed a former Cryptopia employee had been charged with the theft of customer data from Christchurch exchange Cryptopia and the subsequent theft of cryptocurrencies valued at $246,000.

All of the allegedly stolen funds have been returned to liquidators Grant Thornton.

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The man appeared in the Christchurch District Court last month for a second appearance. He is due to appear in court next month.

“At this stage these charges are unrelated to the Cryptopia cyber intrusion in January 2019. The investigation in relation to this cyber intrusion is ongoing,” a police spokeswoman said.

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Liquidators have locked down Christchurch-based Cryptopia. (Video first published in May 2019)

Police declined to comment further while the case was before the courts.

Cryptopia went into liquidation in May last year after a $24m hack in January 2019 lost 15 per cent of its clients’ digital currency stock, made up of about 900 different currencies including bitcoin. It is regarded as the biggest theft in New Zealand history.

The exchange was holding cryptocurrencies worth about $170m and had 800,000 account holders with a positive coin balance.

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The company’s liquidators went to the High Court in Christchurch in March asking for guidance on whether the account holders were entitled to all the currencies in their accounts or whether the funds were debts that ranked along with other creditors.

Creditors were owed about $12m, including Inland Revenue claiming about $5m. A decision for the account holders meant creditors would get about half of what they were owed.

In a judgement released in July, Justice David Gendall found for the account holders, saying Cryptopia held the digital assets on trust by way of a separate trust for each cryptocurrency.

The hack is regarded as the biggest theft in New Zealand history. (file photo)

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The hack is regarded as the biggest theft in New Zealand history. (file photo)

Liquidators David Ruscoe and Russell Moore of Grant Thornton had already spent $3m to secure the cryptocurrencies still in the exchange. One bitcoin is worth about $14,500 at current rates.

Detective Sergeant James Simpson earlier said police were keeping an open mind as to who was behind the Cryptopia hack.

“Is it internal? Is it an organised criminal group somewhere within New Zealand. Is it an international actor? It could be anyone.”

He said the “unique, complex investigation” posed challenges for police, who “haven’t dealt with anything like this before”.

The exchange was started by two young programmers and gamers, Rob Dawson and Adam Clark in 2014. The business grew rapidly in 2017 and had 100 staff at its peak.

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