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Is It Safe to Use Cryptopia Again? The Full Story

Benson Toti

The cryptocurrency world was rocked in January when New Zealand-based exchange Cryptopia was hacked. The site, which has two million users around the globe, saw a reported $US 16.1 million (more than NZ$23 million) taken out of wallets during a sustained attack that began on the 13th of January.

Most of this stolen money was in the Ethereum (ETH) currency, apparently from 17,000 wallets. The site has been offline since then, with few updates issued to let users know what is happening. Understandably, users have been getting frustrated at having their accounts frozen and not knowing whether their money is affected.

The Current Situation

At the time of writing, the Cryptopia website is still offline. However, the company’s Twitter account has been showing signs of life again. They had previously sent links to the police statements and pointed out that they weren’t able to comment on the matter while it was being investigated by the High Tech Crimes Unit, with a team led by Detective Inspector Greg Murton.

After a month with no new tweets being sent, they sent out a message to say that they are “working relentlessly to evaluate” the stolen funds. They also pointed out that the police are still investigating but have given them back access to their building in Christchurch.

It seems that the exchange is free to carry on doing business but no date has been given for when they will go back online. As for the police investigation, they previously pointed out that they could be looking at a “considerable amount of time” to carry it out fully.

What Happened to the Stolen Money?

What happened to the stolen money from Cryptopia

Will the money thieves be able to transfer their coin into fiat currency?

Image source: Higyou/Shutterstock.com

The issue that interests most people is that of the missing money. Have the cybercriminals been able to get out the money from the wallets? This hasn’t been confirmed yet and even the amount stolen hasn’t been officially stated, with the police simply calling it a significant value of cryptocurrency funds.

Blockchain analytics firm Elementus reported that $3.2 million of the stolen Ethereum funds had been liquidated by the 4th of February. This was done on exchanges such as Binance and Bitbox. Naturally, the biggest problem for thieves is that it is extremely difficult to turn stolen cryptocurrencies into fiat money.

Therefore, it is possible that the remainder of the stolen funds will remain in limbo for a long time to come. Anyone who is planning to buy Ethereum will be wary of touching these funds.

Is It Safe to Use This Exchange?

Users are obviously going to be wary of using this exchange in the future. It previously had a decent reputation, as you can see in our Cryptopia review, although we pointed out at the time that it was a target for hackers.

The hack appears to have happened when Cryptopia’s private keys were compromised and their whole database was then controlled by the hackers. The team will need to work hard to convince people that their security is now water-tight.

With so many other exchanges around, it is easy to look around if you aren’t satisfied with security on offer. The likes of the eToro site, which is reviewed here, Coinbase (reviewed here) and Coinmama (which we have also reviewed) are among the trusted sites that many people turn to.

As for Cryptopia, we wait to see what new security measures are put in place, if and when it opens up for business once again.

Featured image source: Sharaf Maksumov/Shutterbay.com


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