February 21, 2024

Cryptopia Liquidators Report Exchange Violation of Anti-Money Laundering Law

Grant Thornton, which is involved in the liquidation of the New Zealand cryptocurrency exchange Cryptopia, presented to the courtevidence that before its hacking in January 2019, the site violated anti-laundering legislation. It is reported by Radio New Zealand.

Having studied the available personal information 2.2 millionCryptopia customers, the company found that when creating most accounts - 933,000 - the exchange only asked for a username and email address.

Another 44,000 early customers, holding a combined total of $ 23 million, did not pass the test and did not have trade restrictions.

Less than a hundred customers with a limit of $ 500,000 pertrading Cryptopia requested proof of identity, a photo with an identity card and a statement explaining the origin of the funds. The exchange verified the addresses of these clients using Google Maps.

However, analysis showed that mostunverified accounts were based in various offshore companies. The geography of Cryptopia users includes the USA, Russia, the UK, India, the Netherlands, Germany, Japan, Canada, Brazil and South Korea. The number of customers from New Zealand is 9,475.

Thousands more accounts with a total balance of more than $ 3 million were found on uninhabited islands near Australia or not identified at all.

Grant Thornton said that all Cryptopia customers will need to provide additional identification information to refund.

Cryptopia Exchange Suspended in January2019 year, informing users of "significant losses" due to a security hole. In May of that year, the exchange stopped trading and announced the beginning of the liquidation process. Damage from a hacker attack, according to some reports, could be $ 16 million, but supposedly no more than $ 24 million.

Grant Thornton began an accurate assessment of the amount of losses in the summer of 2019.

According to company specialists, in Decemberthe amount to finance the liquidation amounted to about $ 9.6 million. Of these, $ 5 million was recovered from a third-party trust account of the exchange, $ 4.4 million was received from the sale of 344 BTC, another $ 202 thousand was received from the sale of furniture and computer equipment by Cryptopia. At the same time, the cost of legal services by December 2010 amounted to almost $ 700,000.