Cryptopia customers are another step closer to seeing some of their funds returned.
In a September 18 interim update for account holders, receivers David Ruscoe and Russell Moore (both with Grant Thornton)said, "We expect the claims registration process to be open by the end of the year."
However, the pair also caution that will just be the latest step in the long-running saga.
They have yet to complete the process of reconciling how some $175 million worth of cryptocurrency should be allocated across some 900,000 accounts. That is, they still can't determine account balances and transaction history.
While advocates of the blockchain (the transactional database that underpins bitcoin and other cryptocurrencies) like to promote its pinpoint accuracy and transparency, the situation was apparently messier in Cryptopia's case.
"While Cryptopia held details of customer holdings and reported these on the exchange, the crypto-assets themselves were pooled (co-mingled) in coin wallets," the liquidators said in their six-month report.
In their latest update, Ruscoe and Moore say, "We have to complete the reconciliation process. This includes re-establishing coins in a non-hacked environment and then reconciling coin balances to the customer database. With over 900,000 active customers and up to 900 different [virtual currencies], this is not a quick process."
Once the reconciliation is finally complete, the liquidators anticipate they will have to head back to the High Court to seek direction "in respect of the distribution process including AML [anti-money laundering] requirements."
In part, the liquidators need court guidance in how far they need to go to meet AML laws' KYC (know your customer) provisions for accurately identifying customers - a potentially problematic area in cryptocurrency, where many customers prefer to remain anonymous.
The liquidators have already sought the High Court's advice once, in the New Year when they sought a ruling on whether cryptocurrency must be recognised as property in NZ.
A landmark April ruling found in the affirmative. That was good news for claimants because it meant the $170m had to be held in trust for the 900,000 account holders (or at least the 800,000 with a positive balance), rather than into the general pool to pay creditors (who were owned some $12.7m, including $5m outstanding to Inland Revenue).
Founders fell out
Christchurch-based Cryptopia was formed in 2014 but went into liquidation in May 2019 after suffering an apparent hack and the loss of $30m in cryptocurrency in January of that year.
Co-founders Adam Clark and Rob Dawson fell out during the year before the cryptocurrency exchange's collapse.
"I'm a simple guy, I just like to develop/write code. By the end of 2017, Cryptopia had grown from me and my best mate to almost 100 people," Clark told the Herald in May last year.
"It was like Game of Thrones, everyone jostling for positions, every decision became about the bottom-line not helping crypto adoption, basically everything I wanted it not to be."
The background of infighting has in turn bred a series of conspiracy theories about the January 2019 attack. But coming up to two years since the hack, authorities are still some distance from establishing the true picture.
Efforts to untangle the situation are ongoing.
Police had no immediate comment today. Earlier, Detective Inspector Greg Murton, who is heading the investigation, said, "We are committed to identifying the actor, or actors, responsible. However, it remains a complex and challenging inquiry,"
The police High Tech Crime Group is working on analysing an enormous amount of digital evidence along with information obtained from various crypto exchanges around the world where the stolen currency has transacted through, Murton said.
"Valuable support and assistance is still being provided by our international law enforcement partners, including the FBI."
In their most recent statutory report, released in June, the liquidators listed total receipts of $11.1m include $1m in funds on hand at the date of the liquidation, $4.4m in cryptocurrency held in a trust fund that was converted to NZ$ and $5m in funds recovered from an exchange in Arizona.
And total payments of $6.3m include $312,992 paid to secured creditors, $1.78m in liquidators fees, $1.3m in legal fees and various costs associated with maintaining Cryptopia's IT infrastructure, and maintaining a skeleton staff.
That left closing funds on hand of $4.7m.