Cryptopia Cryptocurrency Platform Services and Development

[Timelord2067]

I thought I replied to this earlier.

Thank you for the links. You put a lot of effort in to your thread highlighting and capturing details about the scam, all readers and victims should have a look at it.

I cannot understand how the New Zealand police decided to not prosecute Dawson and/or Clark. If they were not guilty of orchestrating and conducting the scam and nobody else could be proven then does that mean the Auckland police should call in a neighbouring police force to carry out a review of the whole process and see if they can question potential perpetrators?

From recollection the last time I looked in on their statements (as covered via Stuff.co.nz etc) the NZ Police's investigation is "on going" and they (NZ Police) aren't giving a running commentary on their investigations.  IIRC the media said something along the lines of all employees have been questioned as well as board members etc.

This would mean those interviewed would have done so under what we call "under caution" - similar (but not the same as) the U.S.' "right to silence" (which in itself is not the same thing as that countries' Fifth Amendment" - i.e. refusing to answer questions under oath)

[digit]

CryptopiaRescue says the liquidator is about to sell off another 80 BTC of customer Bitcoin and there is less than 48 hours for people to submit a notice of opposition.

I would guess anyone with some legal knowledge can do this and don't have to go through CryptopiaRescue but they only group that posted about it.  Grant Thornton for obvious reason is not informing customers about their legal rights and opportunity to challenge them dipping into customer bitcoins.  They never post updates or notify customers until after they do something to prevent challenges to their actions.  and the media has completely failed to hold them to account and keep the public informed of their misconduct and the irresponsible behavior of Grant Thornton.

https://twitter.com/CryptopiaRescue/status/1376528820916809728


If it were known what exchange they are using to dump those 80 BTC on, then it might be possible to legally demand that exchange freeze the funds/coins and account being used as the ownership is disputed, and until Grant Thornton proves that the bitcoin being sold belongs to Cryptopia the company and not the customers.  CryptopiaRescue might be able to help ?

if anyone has Cryptopia BTC addresses they can share (PM me if you don't want to post in here) they will help confirm the cryptopia wallet cluster and trace where bitcoins have gone since the before and after the liquidation start.

[Timelord2067]

if anyone has Cryptopia BTC addresses they can share (PM me if you don't want to post in here) they will help confirm the cryptopia wallet cluster and trace where bitcoins have gone since the before and after the liquidation start.

Do you mean like these lists over on the [Cryptopia] ONLINE ARTICLES related to hack &theft of funds 2020 (non discussion thread?

https://bitcointalk.org/index.php?topic=5097916.msg49253290#post_stolen
https://bitcointalk.org/index.php?topic=5097916.msg49253290#post_frozen


If the "Cryptopia Rescue" are a class action, then I can add their information to this list if they post their details on the other thread.

[digit]

if anyone has Cryptopia BTC addresses they can share (PM me if you don't want to post in here) they will help confirm the cryptopia wallet cluster and trace where bitcoins have gone since the before and after the liquidation start.

Do you mean like these lists over on the [Cryptopia] ONLINE ARTICLES related to hack &theft of funds 2020 (non discussion thread?

https://bitcointalk.org/index.php?topic=5097916.msg49253290#post_stolen
https://bitcointalk.org/index.php?topic=5097916.msg49253290#post_frozen


If the "Cryptopia Rescue" are a class action, then I can add their information to this list if they post their details on the other thread.

yeah i got those, but wanted more to get more confirmation with, or find other clusters not linked to Cryptopia yet.

I would recommend talking to them on their twitter if you are interested in their class action (I have no interest in participating in class action).  I have mention the forum to them so maybe they will come in here and post sometime.

[JollyGood]

I thought I replied to this earlier.

Thank you for the links. You put a lot of effort in to your thread highlighting and capturing details about the scam, all readers and victims should have a look at it.

I cannot understand how the New Zealand police decided to not prosecute Dawson and/or Clark. If they were not guilty of orchestrating and conducting the scam and nobody else could be proven then does that mean the Auckland police should call in a neighbouring police force to carry out a review of the whole process and see if they can question potential perpetrators?

From recollection the last time I looked in on their statements (as covered via Stuff.co.nz etc) the NZ Police's investigation is "on going" and they (NZ Police) aren't giving a running commentary on their investigations.  IIRC the media said something along the lines of all employees have been questioned as well as board members etc.

This would mean those interviewed would have done so under what we call "under caution" - similar (but not the same as) the U.S.' "right to silence" (which in itself is not the same thing as that countries' Fifth Amendment" - i.e. refusing to answer questions under oath)

I wonder if any of those statements will be ever be made public. I would like to know what Dawson and Clark said at the time of the event.


Below is what I wrote in February 2020 about my opinions:

I do not know any of the main protagonists but it did seem clear Intranel were investors that had long term plans to take over the whole company or a majority stake at least and when the company failed there was no need for their Managing Director Dave Sanders to turn up at Court. When Booth took his $400,000 pay off when he was sacked for the disastrous 8 month tenure he effectively severed ties with the company and would not be interested in Court proceedings so would have no reason to attend other than from a moral stand-point where he could have done it.

As for Clark and Dawson they seem to have kept a low profile after calling the liquidators but they did benefit financially overall before the company closed as their properties seem to show. Mrs Clark also seems to have received a pay-off or settlement when she quit but that should not stop any of them attending Court just to see what was going on. Their presence would not mean any innocence or guilt on their part but it would mean they had executed their moral responsibilities towards investors by taking more than a passing interest in what was going on.

I am just not surprised by anybody who once held an authoritative position within the company deciding to not attending Court to see how proceedings were going. It is clear to me it was an inside job. Exactly who did cannot be ascertained but any one person or any permutation of the following could be involved though none have been charged:

Clark
Mrs Clark
Dawson
Mrs Dawson
Booth
Any number of Intranel staff
Any number of Cryptopia staff
Maybe even John Gotts

At one time or another, they all had access to the office where Cryptopia was operated from

[TherapOne]

unnamed should have them most coins integrated allright.
so you dont need to load an years old blockchain if there is one
day realy an payout ^^

https://i.imgur.com/Q6MibBq.jpg

hmmm

[pornluver]

unnamed should have them most coins integrated allright.
so you dont need to load an years old blockchain if there is one
day realy an payout ^^

hmmm

Is the underwriter action reasonable? They're taking 80 bitcoin. They can just let us take login and withdraw like normal?

[estenity]

unnamed should have them most coins integrated allright.
so you dont need to load an years old blockchain if there is one
day realy an payout ^^

hmmm

Is the underwriter action reasonable? They're taking 80 bitcoin. They can just let us take login and withdraw like normal?

good suggestion !

[digit]

Cryptopia Rescue group annouced they submitted a Fraud Complaint against the liquidator Grant Thornton in New Zealand.

https://twitter.com/CryptopiaRescue/status/1377592639155970050


https://www.cryptopiarescue.com/post/fraud-complaint-laid (https://archive.ph/wip/M9Ybf)

Fraud Complaint Laid
As a result of the requests from several of the registered account holders, Cryptopia Rescue has submitted the following complaint to the New Zealand serious fraud office.

We encourage affected people to also lodge their complaint online here https://www.sfo.govt.nz/make-a-fraud-complaint-online

Copy as follows.

Serious Fraud Complaint regarding

Grant Thornton NZ (accountants)

David Ian Ruscoe (liquidator)

Malcom Russell Moore (liquidator)

Buddle Findlay (solicitors)

Scott Barker (solicitor)

Bridie McKinnon (solicitor)

Creating and using documents to defraud and obtain pecuniary advantage.

Background

Ruscoe and Moore were appointed as liquidators of Cryptopia, a Christchurch based crypto currency exchange, in or about May 2019. The liquidators first report can be found here https://www.grantthornton.co.nz/globalassets/1.-member-firms/new-zealand/pdfs/first-liquidators-report-31-05-2019.pdf

In understandable circumstances the first report was limited in information about the financial status of the company. A better understanding of the assets of the company and financial status is found on page 9 of the second report here https://www.grantthornton.co.nz/globalassets/1.-member-firms/new-zealand/pdfs/cryptopia/second-liquidators-report-to-creditors_cryptopia.pdf

Confirmation of the assets and financial status of the company can then be found on page 9 of the third report here https://www.grantthornton.co.nz/globalassets/1.-member-firms/new-zealand/pdfs/third-liquidators-report_cryptopia-12-06-2020.pdf

Again confirmation of the assets and financial status is found on page 7 of the forth report here https://www.grantthornton.co.nz/globalassets/1.-member-firms/new-zealand/pdfs/fourth-liquidators-report_cryptopia.pdf. For some reason the liquidator has changed the whole format of the financial reporting, which makes it difficult for laypeople to follow and understand.

In or about March 2020 a High Court hearing was run by the liquidator to determine the status of the over 960,000 account holders who all had a positive coin balance in their Cryptopia account. At the time the value of coins was roughly USD$130,000,000. Based on current bitcoin price and the movement is many of what are called Alt Coins the current value of coins is closer to USD$800,000,000.

Many of the documents relating to the court case can be found here https://www.grantthornton.co.nz/update-for-cryptopia-account-holders-10-february-2020/

The final court order can be found here https://www.grantthornton.co.nz/globalassets/1.-member-firms/new-zealand/pdfs/cryptopia/civ-2019-409-000544---ruscoe-and-moore-v-cryptopia-limited-in-liquidation.pdf

In summary the High Court order of Gendall states that Cryptopia was effectively a Trustee for the account holders, that the account holders were secured creditors and their digital assets can be returned to them.

The implications of the court hearing basically were … if it was found the account holders were unsecured creditors then the US$120 million of coins could be sold by the liquidator and distribution of dollars after costs would be sent proportionately to all creditors. If it was found the account holders were secured creditors then only coins owned by the Cryptopia company were assets of the liquidation and could be sold to fund the liquidation and pay creditors.

First issue of complaint.

Page 17 of the liquidators first report is an order obtained by the liquidator to sell 344 bitcoin. There is no accountability of what submission was put to the court to obtain the order. What we know from page 10 of the sworn affidavit of Ruscoe is a list of the accounts on the database that the company had coins in, and attached to the affidavit was an electronic file which included those accounts, some details of what coins were in each and a value at the time. That affidavit is here https://www.grantthornton.co.nz/globalassets/1.-member-firms/new-zealand/pdfs/cryptopia/2020/1.-second-affidavit-of-david-ian-ruscoe-sworn-8-november-2019.pdf.

Page 20 of the fifth affidavit of Ruscoe here https://www.grantthornton.co.nz/globalassets/1.-member-firms/new-zealand/pdfs/cryptopia/2020/6.-fifth-affidavit-of-david-ian-ruscoe-sworn-13-february-2020.pdf includes a balance sheet of the company just prior to him being appointed as liquidator. That balance sheet states the company had NZD$747,563.39 of bitcoin prior to liquidation. The value of bitcoin on or around that time was US$4,000 roughly, and so we estimate around 125 bitcoin.

It appears Ruscoe has sold 200 or more bitcoin that were trust assets and not company assets.

Ruscoe in submissions to the court for the hearing in March 2020 raised the issue with Gendall that if the decision of the court was in favour of the argument that account holders were secured he had issues because of the previous order to sell 344 coins.

The financial statements in reports 2, 3 and 4 state that company crypto assets were sold and converted to fiat to the value of $4,427,292. If we look at the 31 March 2019 balance sheet it states there was a total crypto and other liquid asset value of around $4.1m. So benefit of the doubt could be that Ruscoe didn’t sell 344 bitcoin (literally) he sold all the company crypto? We don’t know.

Second issue of complaint.

In March 2021 the liquidator has released an update which includes another order obtained from the court giving him authority to sell another 80 bitcoin. https://www.grantthornton.co.nz/update-to-cryptopia-claimants-and-stakeholders/

At todays rate of US$58,000 per coin that totals US$4,640,000.

The sworn affidavits of Ruscoe do not support this sale. There is nothing in any of the regulatory reports of the liquidator to show the company has any coin assets still. These coins are being sold to further fund the liquidators costs.

Our opinion is the court has been mislead into make both these orders.

Third issue of complaint.

As at 14th November 2020 the liquidator has incurred over NZ$8m in costs for this liquidation.

Of that over $2.3m were in direct fees.

Scott Barker and legal have received over NZ$1.4m

Other costs do not pass the smell test, for example employees costs of NZ$1.9m, Server hosting costs of over $600k. The liquidator indicates IT people are costing $600 per hour, equivalent to a salary of over $1.2m per annum per person.

Summary

1. There is a huge number of documents, too many to just file online.

2. We believe the companies and the individuals list above are receiving pecuniary advantage by creating significant profits for their companies and are incentivised to do so.

3. The law firm involved is incentivised to fast track legal process. Currently several orders obtained by the lawyer on behalf of the liquidator for other related matters are being challenged because the lawyers mislead the court and used wrong procedures in order to obtain their orders without objection of affected parties.

4. The liquidator is appointed to liquidate the Trustee Company, Cryptopia, not any of the trusts. What they are doing is actually selling up secured trust assets to fund the liquidation. This is no different than the lawyer who takes client funds out of his trust account without authority. It is clear the liquidator and their lawyers have mislead the court to get these orders.

5. We believe there will be a significant number of other breaches of the law, there are thousands of pages of documents.

6. It is critical the Serious Fraud office investigates this matter for the following reasons.

a. The amount of money involved exceeds NZ$1 billion dollars.

b. The number of creditors involved exceeds 960,000, the majority of them are all over the world.

c. After discussions with politicians and Government agencies it is clear that there is no governing body keeping these liquidators and lawyers to account. It would take hundreds of thousands of dollars for the creditors to instruct lawyers and for a huge number of them they don’t have any more money.

[KriptoGuruTR]

The Banana Republic of New Zealand, DO YOUR JOB AND CLEAN YOUR SHIT!!!

[JollyGood]

Clark and Dawson brought Grant Thornton in to the picture. They could have hired anybody but went for this company  and they have taken lots of funds from the company.

The 344 Bitcoin they sold at around $12,700 each to recover their costs brought in around $4.4 million but the Cryptopia hack was worth around $23-24 million. If the liquidators had the foresight to have kept those funds and sold them later (as in today) they would be worth around $58,000 each therefore 344 Bitcoin would have brought in around $20 million and many investors facing losses would have been able to recoup their funds in fiat at least.

Reading through the article what comes to mind at first is one very important question: When Intranel staff were told their services were no longer required it made some of the Cryptopia staff upset so was it possible that either one or more Cryptopia staff with or without the collusion of Intranel staff stole the funds and deleted the customer database?

It certainly seems plausible because when the company went under it had a staggering 37 employees including many that were friends with their Intranel counterparts so even if there was just one bad apple from a group of 37 then it would have been possible to bring Cryptopia to a disastrous end: Cryptopia Heist

Cryptopia Rescue group annouced they submitted a Fraud Complaint against the liquidator Grant Thornton in New Zealand.

https://twitter.com/CryptopiaRescue/status/1377592639155970050


https://www.cryptopiarescue.com/post/fraud-complaint-laid (https://archive.ph/wip/M9Ybf)

[aoluain]

Clark and Dawson brought Grant Thornton in to the picture. They could have hired anybody but went for this company  and they have taken lots of funds from the company.

The 344 Bitcoin they sold at around $12,700 each to recover their costs brought in around $4.4 million but the Cryptopia hack was worth around $23-24 million. If the liquidators had the foresight to have kept those funds and sold them later (as in today) they would be worth around $58,000 each therefore 344 Bitcoin would have brought in around $20 million and many investors facing losses would have been able to recoup their funds in fiat at least.

Reading through the article what comes to mind at first is one very important question: When Intranel staff were told their services were no longer required it made some of the Cryptopia staff upset so was it possible that either one or more Cryptopia staff with or without the collusion of Intranel staff stole the funds and deleted the customer database?

It certainly seems plausible because when the company went under it had a staggering 37 employees including many that were friends with their Intranel counterparts so even if there was just one bad apple from a group of 37 then it would have been possible to bring Cryptopia to a disastrous end: Cryptopia Heist

Cryptopia Rescue group annouced they submitted a Fraud Complaint against the liquidator Grant Thornton in New Zealand.

https://twitter.com/CryptopiaRescue/status/1377592639155970050


https://www.cryptopiarescue.com/post/fraud-complaint-laid (https://archive.ph/wip/M9Ybf)

Its quite feasable that thats what could have happened, the disgruntled employees
stole those funds.

So this fraud complaint against GT is likely to rumble on for quite some time and will
no doubt add further delays to accounts and payouts being resolved.

I actually got good news yesterday after a few months of waiting:

....have reviewed your information, and manually approved your Cryptopia account ownership verification on the claims portal.

[JollyGood]

I just cannot understand why the NZ police have not been able to bring criminal proceedings against the person or people they feel are most likely the culprits. If they cannot find any link between any person with access to the sensitive information to the crime then they should bring in an alternative or external police force to make a cold case review. That might help solve the crime and retrieve some of the funds.

Its quite feasable that thats what could have happened, the disgruntled employees
stole those funds.

So this fraud complaint against GT is likely to rumble on for quite some time and will
no doubt add further delays to accounts and payouts being resolved.

I actually got good news yesterday after a few months of waiting:

....have reviewed your information, and manually approved your Cryptopia account ownership verification on the claims portal.

[Lafu]

There is a new Update out since today from the Liquidatores !
You can read the Information and Update here whats going on and what will be coming
https://www.grantthornton.co.nz/update-for-cryptopia-claimants-and-stakeholders-10-june-2021/?fbclid=IwAR2sFnGCcP5GP_AGY95P8NXgvy5Tti2vReD3lPwODjsRXp9-BQNQuYZ9B2Y

https://twitter.com/Cryptopia_NZ/status/1402875702853074948

Will post here again if i get any new Information.

[paramind22]

I couldn't be bothered with filling out a form that kept giving me errors.  They know my email address.  I received numerous emails from them which I confirmed because of the staking coins I withdrew.  

So, for those of us whose time and patience is more valuable then the money we lost, what's the deal if they ever go legit and start paying out?  

Is the window of time over for us to state the obvious to them about who we are?

[Daltonik]

There is a new Update out since today from the Liquidatores !
You can read the Information and Update here whats going on and what will be coming
https://www.grantthornton.co.nz/update-for-cryptopia-claimants-and-stakeholders-10-june-2021/?fbclid=IwAR2sFnGCcP5GP_AGY95P8NXgvy5Tti2vReD3lPwODjsRXp9-BQNQuYZ9B2Y

https://twitter.com/Cryptopia_NZ/status/1402875702853074948

Will post here again if i get any new Information.

In their report, they mention that the second stage of Identity verification will begin this month, but how can you confirm your identity to account holders who have not passed KYC?

^{The next stage of the claim process 2 ‘Identity verification’ will be piloted this month to test functionality with all 183 countries that we understand Cryptopia users are domiciled.}

[pinoycash]

In their report, they mention that the second stage of Identity verification will begin this month, but how can you confirm your identity to account holders who have not passed KYC?

^{The next stage of the claim process 2 ‘Identity verification’ will be piloted this month to test functionality with all 183 countries that we understand Cryptopia users are domiciled.}

I passed the stage 1 verification and for the KYC i am also confused since my account is a NON-KYC account too. But I think the KYC is just formality to ensure they are refunding to a real person.

The main question is what will happen to those users who have multiple accounts that have balances in all accounts.

[.pacman.]

The Banana Republic of New Zealand, DO YOUR JOB AND CLEAN YOUR SHIT!!!

bump

[digit]

Ex-Cryptopia Employee Pleads Guilty to Stealing $170K in Crypto 05 July 2021
https://www.coindesk.com/cryptopia-former-employee-stolen-funds-private-key-usb
https://archive.ph/fHCqS

Ex-Cryptopia staffer admits stealing almost $250,000 of cryptocurrency 05 July 2021
https://www.stuff.co.nz/national/crime/125617315/excryptopia-staffer-admits-stealing-almost-250000-of-cryptocurrency
https://archive.ph/AqmQ7

[Timelord2067]

Ex-Cryptopia Employee Pleads Guilty to Stealing $170K in Crypto 05 July 2021
https://www.coindesk.com/cryptopia-former-employee-stolen-funds-private-key-usb
https://archive.ph/fHCqS

Ex-Cryptopia staffer admits stealing almost $250,000 of cryptocurrency 05 July 2021
https://www.stuff.co.nz/national/crime/125617315/excryptopia-staffer-admits-stealing-almost-250000-of-cryptocurrency
https://archive.ph/AqmQ7

Reading through the two news articles it's clear Cryptopia had very lax security, either through gross negligence, or, as a means for other employees (Owners?) to mount an exit scam at a later date.

It's interesting that the thief (obviously a Christchurch residence) has name suppression.  I'll be keeping a watch to see if any pro-cryptopia forum members suddenly fall silent.