Earlier today, New Zealand-based Cryptopia exchange, announced that it is shutting down all operations. The exchange made this announcement through a press release. It mentioned that it had appointed David Ruscoe and Rusell Moore from Grant Thornton as its liquidators.
According to the press release, liquidating was the best option for all involved parties. The firm noted that this was the final resort. Its management tried to cut costs and make the business profitable once again. However, these efforts bore no fruits.
Cryptopia Suspends All Operations for the Liquidation Process
Cryptopia unveiled that it has shut down all operations for the liquidation to take place.
We realise Cryptopia’s customers will want to have this matter resolved as soon as possible. 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.
He added that,
Given the complexities involved we expect the investigation to take months rather than weeks.
Grant Thornton will also be working with independent experts and authorities regarding its duties. The firm is set to contact all clients and suppliers about its appointment in the next few days. The liquidator added that it will submit an initial report to the New Zealand Companies Office site in the coming week. The company refused to give more information on what will happen to the user funds
Reason for Shutting Down
The exchange suffered a big hack in mid-January this year. This attack saw it lose crypto assets worth $16 million. After the theft, the exchange suspended all activities to give room for investigations. The authorities probing the theft took months. Afterward, Cryptopia opened trading again in mid-April. After a month of trying to stay afloat, the exchange’s site went offline before posting the liquidation notification.
Cryptopia noted that its highly publicized hack had adverse effects on its trading activities.
Following the announcement, the crypto community has been left wondering if Cryptopia’s users will get their funds back. According to a report, the crypto community is not sure what will happen to the funds that the exchange remained with after the hack. This has seen a lot of people question whether this is another case of an exit scam.
A New Zealand media outlet unveiled that the firm’s building is abandoned. It added that the building was locked down with a chain and padlock on the car park gates. People familiar with the exchange’s operations revealed that the firm laid off most of its staff after the hack.
Do you think Cryptopia’s decision to shut down could be an exit scam? Let us know in the comments below.