The major problem in the cryptocurrency exchange has been the data leakage by hackers. Most of the well-known crypto exchanges have fallen victim of data leakage. Binance is one of the world’s largest cryptocurrency exchange in terms of trade volume, was one of the victim exchanges. It lost 7000 BTCs in the process. One of the most disputable hack of the year is the cryptopia hack where the New Zealand-based exchange lost most of Ethereum holdings to hackers.
A report by Elementus, an analytical company for blockchain revealed another hack in mid-January 2019 where the cryptopia exchange lost $ 16 million to the first hack worth of Ethereum and ERC20 tokens. Some of the coins largest amount hacked included Everus, DAPS, Dentacoin, Bytom, Pillar, Cappasity, LINA, Osyter Pearl, Mothership, Lisk ML and Enjin Coin
Coinfirm reported that a great quantity of the hacked cryptopia was transferred to the uppermost cryptocurrency exchanges. This was according to the tweet by AMLT Token and Network which read as Ethereum in cryptopia is being stolen, most tokens are being transferred to topmost cryptocurrency exchanges. This became clear to the people on the cryptopia hack.
Coinfirm also stated that out of the 30790 hacked coins, 10ETH were transferred to major cryptocurrency exchanges which were not mentioned. When Grant Thorton announced the insolvement of the company, that it could not pay its obligations’ when due. Most of its clients were shocked because they thought despite the hack things were proceeding well.
Before launching Cryptopia, the clients had been assured of their tokens highly secured. Furthermore, cryptopia exchange never gave a warning that such matters would arise and the development of the situation that was going on before ending the business and distributing its assets to the claimants. The liquidation process was a shock to the claimants.
Cryptopia exchange declared that withdrawal services for their customers will not take place in the distribution of its assets to claimants because the services will be under maintenances and this was to take several months to come to an end. The unplanned maintenance services was misleading to the claimants.
It is clear that cryptopia leaked data information or they paid the hackers to hack the exchange. Cryptopia brought the business to an end through the liquidation process to lie to the clients making them believe all is well but the higher authorities are the ones involved in stealing from them. This is why cryptopia don’t follow the legal procedure of being able to protect digital assets of investors and traders. Exchanges need to be transparent and enforce high cyber security standards.