NZ exchange Cryptopia suffered a “significant loss” after a hacker attack this week. The small exchange with a daily trading volume of approx. $ 2 million is one of the first exchanges to be hacked in 2019.

A tweet by the Blockchain Security company Hacken on January 15 showed that there was a transfer of 19,870 ETH while the website was in maintenance mode. According to initial estimates, a total of between $ 2.5 and $ 3 million was lost. The police speaks of “significant losses” as well. However, the exact numbers are still unknown.

The timeline of the hacker attack on the exchange

On January 13, significant amounts of crypto assets were transferred to an unknown wallet without authorization. When NZ exchange Cryptopia discovered the incident, the site was temporarily shut down to find the reason and locate the assets.

On January 14, the crypto exchange informed the public in a tweet that the website was in “unplanned maintenance mode” and would be temporarily unusable. The platform assured the users several times that they would be able to trade again in a few days. However, due to the operator’s lack of communication, the customers already had doubts at this time whether this would actually be the case. For example, a tweet by ShadowKnight said:

“Please be more transparent with your updates. It’s been 16 hours now and people who have funds on the exchange need to be updated on the issue and how long it is expected to resolve. “

Finally, on January 15, an official statement of the exchange followed, informing clients about the hacker attack of NZ exchange Cryptopia and the high losses due to it. The related government agencies – including the NZ Police and the High Tech Crimes Consortium, an online crime unit – had already been informed at this point. The exchange therefore told customers that the investigation was already in full swing but that they would not be able to trade in the meantime. Once there would be news, Cryptopia would share it on the company’s social media.

The response to the tweet was a community outcry over the poor security practices of NZ exchange Cryptopia.

On 16 January, the police confirmed in a separate statement that the investigation was already under way at the Cryptopia headquarters in Christchurch. However, it acknowledged that it is a complex case and that the investigation is still in its infancy.

“A priority for police is to identify and, if possible, recover missing funds for Cryptopia customers; however there are likely to be many challenges to achieving this. “

A precise loss therefore still had not been determined at that time. Presumably in response to the strong criticism of customers, the police also pointed out that the company had been fully cooperating. Although this took some of the thunder of people convinced of it being an internal hack or an exit-scam, these scenarios could not be ruled out completely.

What the investigation will bring to light in the future remains to be seen.

The exchange Cryptopia was not the only one to be hacked in January

With this incident, the NZ exchange Cryptopia joined the series of hacked crypto platforms. Even though, the New Zealand exchange is rather small, hackers did not stop at major stock exchanges in the past either.

Other exchanges that have been hacked include:

• Bitfinex
• CoinCheck
• Poloniex
• BitFloor
• Coinbase
• and, unfortunately, many more

In 2018, nearly $ 1 billion in crypto assets have been stolen. And 2019 does not seem to be off to a good start, either. As early as the 5th of January, Coinbase had to report a 51% attack and put the trade with Ethereum Classic (ETH) on ice.

Crypto giant Gate.io also reported a hacker attack with a loss of 40,000 ETC ($ 22,000). Shortly after, the hacker returned $ 100,000 of the stolen assets. Gate.io, therefore speculates that the attack was not for profit, but was rather meant as a reminder of the risks in terms of blockchain consensus and hashing power security.

How the year will develop with regard to crypto-security remains to be seen.

Photo by:

Samuel Ferrara