Update for Cryptopia account holders from the Liquidators
Liquidators' Third Report on the State of Affairs of Cryptopia Limited (In Liquidation)
June 12 2020. The Liquidators' Third Report on the State of Affairs of Cryptopia Limited (In Liquidation) is now available. To read the report click here.
Directions Hearing Judgement
Today 8 April 2020 Justice Gendall delivered his judgement, Finding firstly cryptocurrencies are “property” within the definition outlined in s2 of the Companies Act 1993 and secondly that account holders cryptocurrency were held on multiple trusts, separated by individual crypto-asset type. This means that the cryptocurrencies are beneficially owned by the account holders and are not assets of the company. To read the full judgement click here.
We understand that Cryptopia stakeholders are keen to hear what progress has been made on the liquidation process since appointment. Updates from the Liquidators can be found at:
- June 12 2020 - Liquidators' Third Report on the State of Affairs of Cryptopia Limited (In Liquidation)
- 12 December 2019 - Liquidators' Second Report on the State of Affairs of Cryptopia Limited (In Liquidation)
- 25 October 2019
- 20 August 2019
- 3 July 2019
Directions hearing update
The directions hearing mentioned in the legal directions update below has now been rescheduled to the 11-14 February 2020 at the Christchurch High Court.
In preparation for this directions hearing, we have uploaded all current affidavits and submissions related to these proceedings. These can be found at the below.
The liquidators have applied to the High Court of New Zealand for directions regarding the legal status of customers’ holdings and the ability to hold Cryptocurrency on trust. The Liquidators have asked the Court to appoint two Queen’s Counsel for these proceedings.
The Court has approved the Queen’s Counsel appointment. The Court orders in regards to this can be found at the link below:
- Court Orders as to Representation and service
These should be read in conjunction with the following documents;
- Notice to Creditors Re Application
- Originating application with hearing date
- Affidavit of David Ian Ruscoe
- Interlocutory application
- Memorandum of counsel
Where to go for updates
We appreciate that Cryptopia customers want to know where the process is at and what it means for them and understand the concern they feel. While we are working as fast as we can to resolve the situation as we do not have answers to many customer questions at this stage.
Given the volume of correspondence we regularly receive, we cannot reply to individual correspondence. However, we will continue to provide updates via the Cryptopia website, Twitter and Facebook pages.
First liquidators’ report on Cryptopia released today
31 May 2019
The liquidators for Christchurch-based crypto exchange, Cryptopia released their first report into the company’s affairs today. A copy of the report can be found here.
Liquidators David Ruscoe and Russell Moore have taken steps to secure the company’s assets and have filed a petition in the Bankruptcy Court in the Southern District of New York to preserve the Cryptopia information stored on servers in the US.
The liquidators are continuing the process, begun before the company was placed in liquidation, of recovering crypto-assets compromised from the hack of Cryptopia’s exchange.
The liquidators, this week gained a Court Order from the New Zealand Courts allowing them to utilise certain crypto-assets to recover, preserve and protect assets. At this stage of the investigation the liquidators cannot estimate a date for when the liquidation will be completed. “As liquidators we have a responsibility to protect and preserve crypto-asset holdings for the benefit of those entitled to them,” says Mr Moore. “We are aware of and understand the frustration of Cryptopia’s customers. As there is no legal precedent on crypto assets in New Zealand and worldwide, the distribution of those assets and the overall conduct of the liquidation will require significant direction from the New Zealand Courts.” There will be no further comment from the liquidators at this stage.
Update for Cryptopia account holders
27 May 2019
On Friday 24 May 2019, we filed a petition in the Bankruptcy Court in the Southern District of New York (SDNY) seeking recognition of the New Zealand liquidation in the USA, and we also applied for urgent interim relief. We took these steps to preserve the Cryptopia information that is stored and hosted on servers with an Arizona based business.
What does the interim order mean?
The interim order preserves the Cryptopia data, which includes a SQL database containing all account holders’ individual holdings of cryptocurrencies and the account holder contact details. Without this information, reconciling individual holdings with the currencies held by Cryptopia will be impossible.
What happens next?
Our objective is to protect and to preserve those holdings for the benefit of those entitled to them. We are seeking legal advice about our responsibilities in relation to the various currency holdings.
Can I get my tokens back?
We expect that the process of recovering data and determining how to make distributions to account holders will take some months at least. We understand that this delay will be frustrating for account holders. For that reason, we are working to resolve these issues as soon as reasonably practicable.
How do I get information on progress?
We will keep account holders informed of developments through posts to the Grant Thornton New Zealand and Cryptopia websites. A copy of the order from the SDNY Bankruptcy Court can be downloaded here, as directed by that Court.
David Ruscoe and Russell Moore from Grant Thornton New Zealand were yesterday appointed liquidators of Cryptopia
Despite the efforts of management to reduce cost and return the business to profitability, it was decided the appointment of liquidators was, in the best interests of customers, staff and other stakeholders.
The liquidators are focused on securing the assets for the benefit of all stakeholders. While this process and investigations take place, trading on the exchange is suspended.
“Given the complexities involved we expect the investigation to take months rather than weeks.”
The liquidators are also working with independent experts and the relevant authorities with regards to the company’s obligations.
Grant Thornton will be contacting all customers and suppliers about its appointment in the next few days.
Further enquiries, please email firstname.lastname@example.org