New Zealand Bitcoin Exchange Cryptopia Fails to Reopen after $16 Million Breach
Originally published on: CCN
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March 04, 2019
New Zealand’s hacked cryptocurrency exchange Cryptopia has announced that the scheduled resumption of trading has been postponed. In a tweeted update, the crypto exchange blamed slight delays for the postponement. The Cryptopia site will now re-open as read-only on March 5.
Update: We were aiming to get the site live today however, we have had a slight delay and are aiming to have the site live tomorrow. We will keep you updated as this progresses.
— Cryptopia Exchange (@Cryptopia_NZ) March 4, 2019
The postponement comes after the exchange made various changes aimed at enhancing security following an attack over six weeks ago. As noted earlier, the Cryptopia attack directly targeted user wallets numbering over 76,000. The attackers obtained private user keys and managed to steal tokens worth millions of dollars.
Cryptopia’s New Security Measures? Will they be Enough to Win Back User’s Confidence?
As a solution, Cryptopia announced last month that it was securing all wallets individually. The cryptocurrency exchange also advised users to avoid depositing funds into the old addresses. By the end of last month, Cryptopia had disclosed that 24% of the wallets were hosted on new servers:
We have transitioned 24% of all wallets to our new secure servers. Once the read only site is online, we will be keeping users up to date on which wallets have been checked and secured via the coin info page.
Though there has conflicting information regarding the amount that was stolen in the hack, Cryptopia recently revealed that it was less than 10% of the total holdings.
We are continuing to work on assessing the impact incurred as a result of the hack in January. Currently, we have calculated that worst case 9.4% of our total holdings was stolen. Please keep an eye on our page for further updates today.
— Cryptopia Exchange (@Cryptopia_NZ) February 27, 2019
Full Extent of Cryptopia Security Breach
Initially, it had been estimated that $2.5 million had been stolen in the attack. Researchers at Elementus, a blockchain analysis firm, however, revised this figure to $16 million as CCN reported.
Per the researchers, the cryptocurrency assets that were stolen included ether worth more than $3 million. Other assets include Dentacoin worth $2.4 million and Centrality worth $1.1 million.
New Zealand Exchange Cryptopia Lost $16 Million in Hack, Not Initially Reported $2.5 Million: Research https://t.co/PlfvRtqPfy
— CCN.com (@CCNMarkets) January 24, 2019
The hacking of the cryptocurrency exchange has also prompted the founders of Cryptopia to return to the firm. In a tweeted statement the crypto exchange announced that Adam Clark and Rob Dawson would be making a comeback:
Further to our news yesterday, we are pleased to announce the return of our both our founders Adam Clark & Rob Dawson back into Cryptopia, their focus will be to set a clear strategic direction moving forwards. More updates to come.
Did the Fast Growth Overwhelm Cryptopia’s Security Features and Systems?
Clark and Dawson started the firm close to three years ago as a hobby. Before the hacking in Mid-January the firm had just hit 1.4 million users. Just prior to the hacking, Dawson had already disclosed that the firm was getting overwhelmed by its increasing popularity:
We’re in an unprecedented time with adoption and interest in cryptocurrencies and blockchain surging and Cryptopia is dedicated to being a quality service provider in this evolving landscape. Please bear with us, as we know how frustrating it can be for users involved in issues impacting their ability to transact freely, but we’re in an unprecedented time.
With the founders returning to Cryptopia, it will be interesting to see whether the growth momentum will be sustained while not compromising on security.