It has been reported by the liquidators of Cryptopia that it owes over US$2.738 million to creditors. Cryptopia is New Zealand’s failed crypto exchange. This information was released by the liquidators of the company in their first report on the firm’s financial situation. Massive debt of $27 million owed by crypto exchange Cryptopia.
The report was published on Friday by the appointed liquidator, Grant Thornton New Zealand. The report details the following:
- 69 unsecured creditors are owed at least $1.37 million
- secured creditors, including Dell NZ and Coca Cola Amatil (NZ) are owed over $912,000
- there is an expected deficit of $1.63 million
In addition to what the firm owes to creditors, employees are owed $207,000 for outstanding salaries and holiday pay, as well as $177,000 in unsecured debt.
According to Grant Thornton, the amount owed to unsecured creditors is likely to rise.
There were “significant losses” incurred by Cryptopia when it was hit by a major hack in mid-January. It was estimated by a blockchain data analytics firm that as much as $16 million in ether and ERC-20 tokens could have been lost in the hack. Despite its banking issues, it later restarted trading services amid. The company finally went into liquidation, and suspended trading operations earlier this month.
Even though Cryptopia restarted trading, the liquidators report said volumes: “were insufficient for the Company to meet its debts as they fell due and it was decided the appointment of liquidators was in the best interests of customers, staff and other stakeholders.”
Grant Thornton filed for bankruptcy protection in the U.S. earlier this week. The filing was to preserve Cryptopia data that was stored and hosted on servers with an Arizona-based firm.
It remains unclear what the total amount owed to customers is. Grant Thornton said:
“The Company held cryptocurrency in wallets by cryptocurrency and has a database detailing the customer transactions and balance allocated to each customer. We are currently gaining access to the database to undertake a reconciliation of the holdings against the customer balances. Until the user balance database is reconciled with the crypto-asset wallets operated by the company, we cannot confirm the value of Customer holdings.”
The exchange possessed $691,229 in cash, at time of liquidation, but had a loan of around $150,000. The amount recoverable out of the fixed assets the company has is around $242,000, despite the face value being over $1.3 million.
New Zealand’s tax authority was carrying out an audit when the firm filed for liquidation, therefore, Cryptopia’s tax liabilities are still unknown.
The liquidators are enlisting help from former staff in an effort to recover the cryptos lost in the hack. The search is ongoing by the local police.
The report said:
“This involves gaining access to the company’s crypto-assets wallets and transferring them to secure cold storage where available”.