On Friday, May 24th, New Zealand-based cryptocurrency exchange Cryptopia filed for bankruptcy protection. This comes five months after the exchange was hit with a major hack that cost them an estimated $16 million in losses. Unfortunately, they were never able to fully recover from the aftermath of the hack due to low trading activity and various banking issues preventing users to access various services offered by the platform.
What Happens Next?
The petition filed by Cryptopia seeks to preserve the data stored on their Arizona-based servers. Among the information on these servers is information on all account holders, including their cryptocurrencies and contact information. Cryptopia claims that losing this information will make it impossible to refund money.
Cryptopia appointed professional firm Grant Thornton to oversee the liquidation proceedings. But that doesn’t mean that Cryptopia’s users can expect to see their cryptocurrencies anytime soon. While initially told that they would be reimbursed in a few weeks, Grant Thornton recently admitted that it could take months for users to be reunited with their crypto holdings.
In other news, Cryptopia founder Adam Clark announced a new exchange was in the works to replace Cryptopia. Adam left the Cryptopia team at the beginning of 2018 due to issues with management and the direction of the project. So, it looks like New Zealand will be getting a new trading platform in the wake of Cryptopia’s failure.
Don’t Store Money on Exchanges
Cryptopia is yet another example of why investors and traders should never use exchanges in the place of wallets. While it’s reasonable to leave some money on exchanges to facilitate quick trades, the bulk of your crypto holdings should be stored on your personal wallet. That way, your money is always in your control, keeping it protected from hackers and company mismanagement.
Learn more about how to safeguard your investments while staying on top of other groundbreaking news by bookmarking CryptoTraderNews.com.
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