Nearly a year on from the Cryptopia cyber-heist, the situation remains something of an unholy mess, with even the most basic question unresolved and customers far from seeing any funds returned.
But it is heading for a potentially precedent-setting court hearing in February that could determine customers' rights to their funds when a crypto-exchange falls over - whether because of a hack or commercial misfortune.
On January 14, the Christchurch-based cryptocurrency exchange told police it had suffered a hack. No sum was given, but some experts subsequently estimated anywhere between $23 million and $35 million.
Cryptopia went offline after the attack and only re-opened briefly, on a limited basis (customer were given "read-only" access to their accounts) before falling over. David Ruscoe and Russell Moore from Grant Thornton New Zealand were appointed liquidators of Cryptopia on May 15. Its US business was also bankrupted, and Ruscoe and Moore will able to seize data from servers in Arizona that hosted Cryptopia's service.
Police had no major breakthrough to report when approached by the Herald this week, and could not give even a broad timeframe for when the case could be resolved.
"We are committed to identifying the actor, or actors, responsible. However, it remains a complex and challenging enquiry," said Detective Inspector Greg Murton, who is heading the 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.
"Valuable support and assistance is still being provided by our international law enforcement partners including the FBI," Murton said.
On one level, the liquidators have had more immediate success.
Ruscoe and Moore said in their six-month report, issued on December 11, that they had recovered a not insubstantial $10.9m after recovering $5m that was sitting in a third-party trust fund at the time of the liquidation, $1m in funds on-hand, plus $4.4m from crypto-currency that sat outside customers' digital wallets that was converted into fiat (regular) currency) following a May High Court order, plus the sale of miscellaneous assets.
After costs including $689,000 in legal fees, $823,000 in liquidators' fees and more than $1m in costs associated with rent, salary and server fees as a number of Cryptopia's 37 staff were kept on to help untangle the company's affairs, Ruscoe and Moore had a net $7.2m on hand.
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On the face of things, that is more than enough to potentially pay preferential creditors (staff are owed $200,000; IRD is completing an audit to determine if there are any preferential taxes owning) and 26 unsecured creditors who are due a collective $3m.
However, there are also the 900,000 active Cryptopia customers at the time of the Christchurch-based, global exchange's collapse.
Here: there are two major complications. One, establishing how much the customers are owed. And two, establishing in legal terms if their cryptocurrency should be defined as property under the Companies Act (1993). That, in turn, will inform whether Cryptopia customers are trustees - effectively secured creditors who should be paid out - or whether their digital currency was beneficially owned by the company so that, as Ruscoe puts it, "they go into the pot as unsecured creditors."
Blockchain or blockheaded?
On the first point, how much was taken in the heist - or, effectively, how much they could be owed - is still a very open question.
The liquidators have yet to reconcile the amount in customers' accounts or digital wallets now with the amount before the January 15 hack (after which the exchange went offline).
You might think this would be a straightforward process, given that advocates of the blockchain (the transactional database that underpins bitcoin and other cryptocurrencies) like to promote its pinpoint accuracy and transparency.
But it seems that behind the scenes things were 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 say in their six-month report.
"As a centralised exchange, customers' trades would occur in the exchange's internal ledger without confirmation on the blockchain," they add.
"No detailed reconciliation process between the customer databases and the crypto-assets held in the wallets has ever been completed."
It will take "some time" to eventually get a reconciliation, Ruscoe and Moore say in their report. There is no more definitive timeframe. It involves "a full rebuild of the wallet environment". The situation is complicated by the fact that Cryptopia had millions of trades involving, potentially, some 900 different crypto-currencies.
The liquidators are also still in an "early phase" of identifying all the wallet holders.
Seeking legal direction
In terms of determining whether crypto-currency should be defined as property, Ruscoe and Moore filed a High Court application on October 1. A hearing is scheduled for February 3.
The question is a key one given that Cryptopia (like nearly all crypto-currency exchanges) offered no guarantees around funds, and was not subject to any government guarantees (a downside of being outside any sovereign system).
Ruscoe tells the Herald that the liquidators are neutral, they simply want legal direction.
However, he notes that if the court decides crypto-currency is not property, effectively sending account-holders who lost funds in the hack to the back of the queue, then "there could well be a lot of litigation".
An already messy and complicated situation would get messier.
The next liquidator's report is not due until mid-2020, but Ruscoe says he and Moore will issue an interim update after the February 3 hearing.