A Message from XTRABYTES CEO on the Cryptopia Hack

[fishfishfish313]

To all XBY holders,

It was brought to our attention that on January 14th, 2019 Cryptopia had suffered a security breach. Police were called in to investigate. I have reached out to the exchange to understand how XTRABYTES™ investors were affected. They have been instructed not to communicate about this matter during the investigation.

To secure our investors coins, we made a decision to freeze the Cryptopia wallets for the time being. This took the majority of a day (January 15th, 2019) to complete.


A brief lesson on exchanges

When you enter an exchange, you are essentially leaving your coins in the exchange wallet at the door. You receive a copy that is used to trade within the exchange. This is all invisible to the user. When you leave the exchange, these copies are traded for the real coins/tokens removing them from the exchange wallet of each respective coin/token.


What does this mean?

Currently we can see who (addresses) brought coins into the exchange. We do not have visibility if they sold these coins within the exchange. This is visible on the exchange order books only.

Example: I bring in 1 Bitcoin to the exchange. I purchase 30,000 XBY. The exchange sees this on their order book but the XBY Block Explorer will have no record of this until I withdraw these purchased coins from the exchange.

At this point, anyone trying to transfer coins from the Cryptopia wallet (potential hacker), will not be able to. Once Cryptopia comes back online, we will unfreeze the wallet. This means everyone will have access to the coins that were in their Cryptopia wallets.


What happens if Cryptopia is down for an extended period of time?

Currently this situation is between Cryptopia and the police to resolve. We are simply protecting their wallets by freezing them. If they are unable to resolve this issue, we will request a third party to review their order book. This is to maintain the privacy of the exchange member. We will then be able to verify claims of holdings and transfer coins from the 2 wallets to the rightful owners.


What exchanges can I trade on now?

We applied (January 7/8) to additional exchanges and are currently in a review period. Once we are approved, we will update our home page to reflect the new exchanges as well as making an announcement.

Current exchanges that offer XBY trading are:
Tradesatoshi: https://tradesatoshi.com/
Nova Exchange: https://novaexchange.com/


What should I do?

To protect your investment please make sure to do the following:

Transfer your coins to your computer wallet or paper wallet.

Backup your wallet.

Upgrade to the latest available wallet.

We will continue to monitor the situation and provide updates as we receive them.

Thank you
Allen Rothwell
CEO – XTRABYTES Ltd.

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[wuvdoll]

At least they made a statement but this is the trouble with these types of coins and also bigger coins. It is great that your xtrabytes are safe because the team is working on finding a solution and trying to freeze or unfreeze and so forth however this also means that coin is basically centralized.

If the team is capable of doing these to prevent something bad to happen how are we so sure that they won't use this for their advantage in the future as well ?

We have to trust that they are good people and they will do the right thing and this example shows that they are actually good people but that is not really a good thing in crypto world, we need to know that they can't do anything and money is so decentralized that even when hacked its gone instead of trying to get it frozen and the blockchain reversed or whatever. It is the bad thing in the good thing, kinda like ying yang.

[fapnnap]

yo fish, stop promoting scams

[chocopapaya]

Cryptopia finally got up and running after a loooooooooong time.
It's amazing that after so much history with hacks and breaches people still leave a large amount of their coins on an exchange.

The statement by xtrabytes really clarifies what is actually going on when you use a centralized exchange.
You are really trusting them with all your money and you don't have much control over it.
In the case of a bank, its similar, but now there are so many laws and regulations along with insurance, that you can feel safe.

Exchanges don't have any of that.
There just isn't any security.

That's why crypto should and is going back to its p2p roots.
decentralized is what crypto was made for and decentralized exchanges is where crypto shines.

[levyashin]

I had some XTRABYTES on cryptopia and they seem secure so there is not a problem for xtrabytes holders on cryptopia besides the time they lost.

[coin-investor]

Unfortunately, tradesatoshi is also a scam exchange and that's bad luck for Xtrabytes user, there are so many reports in the scam sections and some of them are not yet resolved, better take out tradesatoshi to your recommended site to trade Xtrabyte.

[Danslip]

To protect the coins investors need to hold the private keys that give privilege to the owner for spending and signing the coins inside the address.

Unfortunately, tradesatoshi is also a scam exchange and that's bad luck for Xtrabytes user, there are so many reports in the scam sections and some of them are not yet resolved, better take out tradesatoshi to your recommended site to trade Xtrabyte.

I agree with your opinion, it makes sense to stay away from scam exchanges.

[coinplus]

Hmmm, freezing the wallet, is that even necessary now or they trying to use the advantage of the cryptopia hack to carry out something fishy.

I think it a very good thing that they made the announcement before carrying it out, so my advice to everyone that owns that coin on cryptopia exchange is for them to find a way to withdraw their coins to an external wallet were they will have full control over the private key because I smell something very seriously fishy.