Cryptopia's Liquidator Claws Back $7.2M, But Identifying Crypo Ownership a 'Mammoth Task'

The liquidator for the collapsed New Zealand-based crypto exchange Cryptopia has retrieved $7.2 million on balance since the platform was hacked for possibly $16 million in January.

Although said to be "Well underway," the report also offers an explanation of the time-consuming process needed to identify each customer's holdings.

"We are working to reconcile the accounts of over 900,000 active customers, many holding multiple crypto-assets, millions of transactions and potentially over 900 different crypto-assets." the liquidator said.

It's proving extremely difficult to find out how much of which assets customers held on Cryptopia, the liquidator said, citing two reasons.

Firstly, the customers did not have individual wallets, and crypto assets were instead pooled in general wallets.

" While Cryptopia held details of customer holdings and reported these on the Exchange, the crypto-assets themselves were pooled in coin wallets.

As a centralised exchange, customers' trades would occur in the exchange's internal ledger without confirmation on the blockchain.

The exchange never completed reconciliation of its customer databases with the cryptocurrencies actually held in its wallets, leaving a "Mammoth task" to ascertain each customer's holdings.

The liquidator has appealed to New Zealand's High Court seeking directions on the legal status of crypto assets in the nation.

Whether the court rules that crypto assets count as property or not will decide whether they can be held on trust for affected customers or whether the firm keeps beneficial ownership, Grant Thornton said.