Hacked Cryptopia exchange placed in liquidation

Cryptopia founders Adam Clark and Rob Dawson. Photo / Supplied

Hacked Christchurch-based cryptocurrency exchange Cryptopia has been placed in liquidation after attempts to re-open the business failed.

David Ruscoe and Russell Moore from Grant Thornton were appointed yesterday, according to Companies Office records.

Cryptocurrency experts have estimated that $23 million-worth of investors' crypto coins were stolen when a hacker or hackers broke into the Christchurch exchange on January 13.

The liquidators said their initial focus is on securing the assets for the benefit of all stakeholders. Trading on the exchange has been suspended while investigations take place.

Cryptopia has been working with New Zealand Police to try to work out who the hacker is and where the cryptocurrency has gone, but investors have been frustrated by the lack of information.

"We realise Cryptopia's customers will want to have this matter resolved as soon as possible," Ruscoe said in a statement.

"We will conduct a thorough investigation, working with several different stakeholders including management and shareholders, to find the solution that is in the best interests of customers and stakeholders.

"Given the complexities involved we expect the investigation to take months rather than weeks."

"Police continue to investigate the unauthorised transfer of crypto-currency worth a significant sum from Christchurch-based crypto-currency trading company Cryptopia on 13-14 January 2019."

The liquidators are also working with independent experts and the relevant authorities with regards to the company's obligations.

The heist has also seen Lowndes Jordan partner Rick Shera and others highlight some of the drawbacks of cryptocurrency, from the fact that digital currency earns no interest to the lack of regulation to potential tax complications to the inaccessibility of funds if a password is lost to the fact crypto-exchanges typically lack a deposit guarantee, or the financial wherewithal to follow it through one if they do."

Cryptopia has not responded to questions on its deposit guarantee policy or other issues related to the January hack.

Last year, Cryptopia said it had 80 staff (although it was not clear how many were contractors) and 1.4 million users worldwide.