Customers of New Zealand’s controversial crypto exchange will celebrate today after a court ruling that considers the assets “property” of the account holders.
Cryptopia was liquidated in May last year after a hack that resulted in a loss of $ 16 million in January of the same year.
Cryptopia shifts capital into Fiat funds
Cryptopia, which had up to 900,000 accounts worldwide, applied for US bankruptcy protection. He “disappeared” after the hack that resulted in the theft of 15% of his customers’ cryptocurrency properties. [Bloomberg]
According to the Cryptopia file, which reopened last April to allow users to view funds, it still had tens of millions of crypto assets that liquidators wanted to collect and distribute to account holders.
Complications arose from the fact that the company did not assign customers individual portfolios. They distribute the funds in such a way that it is difficult to determine the balance of the individual customer accounts.
Court side with customers
In an unprecedented decision, the Christchurch Superior Court sided with customers and found that the funds were withheld on their behalf.
In a decision released today, judge David Gendall ruled that Cryptopia has digital assets through trusts for each cryptocurrency.
The company tweeted the results and found that the ruling declared the missing cryptocurrencies “property” under Section 2 of the 1993 Companies Act.
(1/2) Today, April 8, 2020, Justice Gendall delivered his verdict, noting that cryptocurrencies are, first, “property” as defined in s2 of the Companies Act 1993, and second, that the cryptocurrency is held by account holders several trusts was kept separate from …
– Cryptopia Exchange (@Cryptopia_NZ) April 8, 2020
The ruling added that cryptocurrencies are owned by account holders and are not a company asset. The judge acknowledged the unusual circumstances of the case and said: “The lawyer points out that, to the best of our knowledge and belief, this is the first time that such cryptocurrency-related matters have been brought before the New Zealand courts.”
Grant Thornton’s liquidators have reportedly already spent up to $ 1.8 million on securing cryptocurrencies that are still on the market. The cryptopia had allowed account holders to trade around 900 digital assets, more than any other exchange in the world at the time.
The official decision states that the liquidators estimated that Cryptopia currently has around $ 170 million in digital assets (approximately $ 100 million). However, it remains to be seen how much is actually distributed among the account holders.
A New Zealand media company Stuff report in February examined the history of the exchange and its founders, and concluded that the police had not yet determined whether the hack was an inside job or not.
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