[2019-05-15] Crytopia Opts for Liquidation Binance for Upgrade

[CryptoBry]

Hacked cryptocurrency exchange Cryptopia has appointed liquidators as executives warn of an investigation lasting “months rather than weeks.” Meanwhile, Binance is undergoing a major upgrade.

Accounting firm Grant Thornton confirmed it was overseeing liquidation procedures at the New Zealand exchange, which lost $23 million NZD ($15.1 million USD) to hackers in January. “Despite the efforts of management to reduce cost and return the business to profitability, it was decided the appointment of liquidators was in the best interests of customers, staff and other stakeholders.”

Source: https://bitcoinist.com/crypto-cryptopia-liquidation-binance-upgrade/

Cryptopia and Binance both became victims of hacking but while Binance seems to be doing well and can emerge stronger, better and definitely financially solid, the same can't be said of Cryptopia which is now saying its farewell walk in the world of cryptocurrency. This can be an interesting study of where and how Crytopia failed in managing and containing the crisis and how and why Binance is succeeding its major challenge.

[buwaytress]

Shame to see it go. On one hand, I personally feel for any type of Bitcoin enterprise that's been started by a few people. Where we are today and where we're going tomorrow, that's always been down to the handful of people passionate about doing something with their hands, and not all the corporates, the suits and ties, the institutional money, the JPMorgan coins and Facebook coins.

On the other, I think they really had to learn from the past mistakes. Bought over from the original people, the new management somehow managed to repeat all the same problems. Cryptopia was a good name to know, but it's so dirty now it probably should be laid to rest once and for all.

[Vishnu.Reang]

Cryptopia was not very comfortable with trading and holding Ethereum in its platform. That's why Ether was once delisted from Cryptopia. They always claimed that ETH was very vulnerable to hacking and Cryptopia didn't wanted to hold ETH or tokens from the users. But Cryptopia had to list that coin again as the customers demanded it and petitioned for its inclusion. And in the end, ETH relisting resulted in the complete liquidation of the exchange.

[Slow death]

it is very important that there be thorough investigations into the hacker cases that these exchanges were targeted because it seems to me that they involve officials of those exchanges. unfortunately the news channels and even these exchanges do not provide much detail on how the investigations are being conducted by the police so it is difficult to know if have any suspects or if have any indication of involvement of the exchange workers.

[CryptoBry]

it is very important that there be thorough investigations into the hacker cases that these exchanges were targeted because it seems to me that they involve officials of those exchanges. unfortunately the news channels and even these exchanges do not provide much detail on how the investigations are being conducted by the police so it is difficult to know if have any suspects or if have any indication of involvement of the exchange workers.

I am not sure if there can be thorough investigation as to what happened in Cryptopia and if there is that possibility that inside people can also be involved. These days, in the age of the internet and cryptocurrency, it can get so hard to get into the depth of a fraud. The suspect of this hack is no other than North Korea as this rogue country is continuing legacy of mess and interference with other countries and their business using their talented and genius hackers. After the Binance hack we now realize that no one is safe as even those who can afford the best security measures and technologies can still be victims. This is the big lesson for all cryptocurrency exchanges this is the time to fortify the defenses otherwise they can be risking their own members or users.

[Kemarit]

it is very important that there be thorough investigations into the hacker cases that these exchanges were targeted because it seems to me that they involve officials of those exchanges. unfortunately the news channels and even these exchanges do not provide much detail on how the investigations are being conducted by the police so it is difficult to know if have any suspects or if have any indication of involvement of the exchange workers.

We can't really discounted the fact that it could really an inside job to pull an exit scam. I'm also wondering if they're really fully cooperating to the authorities, opening their books, give access to the servers and other pieces of evidence. Good riddance though.

On the other hand, Binance case was different, they immediately jump in and quell everything by saying that they have SAFU to cover up everything. They could set another precedence, but I doubt other exchanges have this sort of money insurance to cover the hack or the lost funds. Different exchanges, different (exit)plans.

[figmentofmyass]

On the other hand, Binance case was different, they immediately jump in and quell everything by saying that they have SAFU to cover up everything. They could set another precedence, but I doubt other exchanges have this sort of money insurance to cover the hack or the lost funds. Different exchanges, different (exit)plans.

coinbase has an actual insurance policy on their hot wallets. so coinbase and binance stand in stark contrast to entities like bitfinex, who apparently pays the vast majority of net income to shareholders.

when bitfinex got hacked in 2016, they were left completely insolvent. and now that regulators have frozen $850m of customer dollars, they are completely insolvent too. it's amazing that people keep putting faith in such an operation.

[erikalui]

coinbase has an actual insurance policy on their hot wallets. so coinbase and binance stand in stark contrast to entities like bitfinex, who apparently pays the vast majority of net income to shareholders.

when bitfinex got hacked in 2016, they were left completely insolvent. and now that regulators have frozen $850m of customer dollars, they are completely insolvent too. it's amazing that people keep putting faith in such an operation.

Coinbase has insurance only for it's online wallet and saves the rest in an offline wallet which has no insurance. Same is for Binance, Circle, Xapo and Gemini which are protected by insurance but there is an upper limit which can be covered by insurance and it's not for all the funds.

[figmentofmyass]

coinbase has an actual insurance policy on their hot wallets. so coinbase and binance stand in stark contrast to entities like bitfinex, who apparently pays the vast majority of net income to shareholders.

when bitfinex got hacked in 2016, they were left completely insolvent. and now that regulators have frozen $850m of customer dollars, they are completely insolvent too. it's amazing that people keep putting faith in such an operation.

Coinbase has insurance only for it's online wallet and saves the rest in an offline wallet which has no insurance. Same is for Binance, Circle, Xapo and Gemini which are protected by insurance but there is an upper limit which can be covered by insurance and it's not for all the funds.

that's why it says "coinbase has an actual insurance policy on their hot wallets".

coinbase said they keep <2% of funds in hot wallets. an insurance policy covering the other 98% would be totally unaffordable. like binance, they're planning for the contingency that their online systems are penetrated by external attackers.

if coinbase, binance, or any other similar platforms have their cold storage compromised, customers are completely and utterly screwed. there will obviously be no recovering from that. and this is why we don't use exchanges (even highly reputable and capitalized ones) to store money. that's what bitcoin wallets and bank accounts are for.

[dunfida]

it is very important that there be thorough investigations into the hacker cases that these exchanges were targeted because it seems to me that they involve officials of those exchanges. unfortunately the news channels and even these exchanges do not provide much detail on how the investigations are being conducted by the police so it is difficult to know if have any suspects or if have any indication of involvement of the exchange workers.

Every exchange hacks they do really have that kind of the same thing when it comes to investigation which it turns out to be isolated
which it should really be at least transparent on whats actually happening behind so the entire community will able to know.

Cryptopia havent able to stood up their foot just like on what binance did.They both experience hacks but one shows on how
it should be handled and now they do able to retain or maintain up their previous reputation.

[erikalui]

that's why it says "coinbase has an actual insurance policy on their hot wallets".

coinbase said they keep <2% of funds in hot wallets. an insurance policy covering the other 98% would be totally unaffordable. like binance, they're planning for the contingency that their online systems are penetrated by external attackers.

if coinbase, binance, or any other similar platforms have their cold storage compromised, customers are completely and utterly screwed. there will obviously be no recovering from that. and this is why we don't use exchanges (even highly reputable and capitalized ones) to store money. that's what bitcoin wallets and bank accounts are for.

Not using exchanges is not a solution as many altcoins are listed on exchanges like binance etc. and if anytime you need to exchange these altcoins for bitcoins/ETH or even you need to convert it to fiat, you can't do that through any hardware wallet. You need to pass through these exchanges and that's why we actually have no options than to immediately liquidate it via exchanges and then transfer them to our banks. Exchanges too take 1-2 days to transfer.

[figmentofmyass]

that's why it says "coinbase has an actual insurance policy on their hot wallets".

coinbase said they keep <2% of funds in hot wallets. an insurance policy covering the other 98% would be totally unaffordable. like binance, they're planning for the contingency that their online systems are penetrated by external attackers.

if coinbase, binance, or any other similar platforms have their cold storage compromised, customers are completely and utterly screwed. there will obviously be no recovering from that. and this is why we don't use exchanges (even highly reputable and capitalized ones) to store money. that's what bitcoin wallets and bank accounts are for.

Not using exchanges is not a solution as many altcoins are listed on exchanges like binance etc. and if anytime you need to exchange these altcoins for bitcoins/ETH or even you need to convert it to fiat, you can't do that through any hardware wallet.

nobody said not to use an exchange at all. but you definitely shouldn't be storing money there---using them as wallets---as many people do. the longer you hold your funds on an exchange, the more likely they are to be locked up or lost in one of these hacks.

just deposit coins-->trade-->immediately withdraw. that's the best you can do.

[joniboini]

Not using exchanges is not a solution as many altcoins are listed on exchanges like binance etc. and if anytime you need to exchange these altcoins for bitcoins/ETH or even you need to convert it to fiat, you can't do that through any hardware wallet. You need to pass through these exchanges and that's why we actually have no options than to immediately liquidate it via exchanges and then transfer them to our banks. Exchanges too take 1-2 days to transfer.

There is another solution(s), such as using DEX like Bisq or atomic swap, though not a lot of people prefer doing that way. You also miss important points from figment post that essentially said use exchange like an exchange, not a wallet.

So many people are storing their crypto in exchanges and never withdraw it due to various reasons, and that's why when the exchange got hacked they're rekt af. Sadly most of us learned the hard way, and that's why I believe case like Cryptopia or any other exchange won't stop unless customer also realizes their own responsibility.

[Vishnu.Reang]

So many people are storing their crypto in exchanges and never withdraw it due to various reasons, and that's why when the exchange got hacked they're rekt af. Sadly most of us learned the hard way, and that's why I believe case like Cryptopia or any other exchange won't stop unless customer also realizes their own responsibility.

I am afraid that you are over-simplifying the situation. I am someone who stores some of my altcoins in exchange wallets. Do you know the reason why I do that? Because I don't have any other viable option. I have 20-30 different altcoins in my portfolio and it is not practical to install the desktop wallets for all of them. And online wallets are not available for all the coins. So the only option left is to store them in the exchanges.

[erikalui]

nobody said not to use an exchange at all. but you definitely shouldn't be storing money there---using them as wallets---as many people do. the longer you hold your funds on an exchange, the more likely they are to be locked up or lost in one of these hacks.

just deposit coins-->trade-->immediately withdraw. that's the best you can do.

The issue here is that we can't do anything "immediately" as deposits and withdrawals on exchanges are not instant and then you need to trade them not at a dumping price as prices keep fluctuating. This atleast takes 2-3 days and sometimes a week in my case, I tried to withdraw my coins from exchanges and noticed they were charging half the coins as fee (which is not at all a feasible situation). We don't have many trusted exchanges and the ones that call themselves reputed are charging high fee which discourages the user from withdrawing their own coins.

Also, like Vishnu.Reang, I also have coins that have their own desktop and android wallets and when my online wallet got hacked, I stopped downloading wallets to store the coins and then exchanges became the only option.

Since now none of the exchanges are trusted, I have stopped accepting altcoins that come with their own wallet and asked the managers to hold them for me as I have no other option.

There is another solution(s), such as using DEX like Bisq or atomic swap, though not a lot of people prefer doing that way. You also miss important points from figment post that essentially said use exchange like an exchange, not a wallet.

So many people are storing their crypto in exchanges and never withdraw it due to various reasons, and that's why when the exchange got hacked they're rekt af. Sadly most of us learned the hard way, and that's why I believe case like Cryptopia or any other exchange won't stop unless customer also realizes their own responsibility.

Bisq and atomic swap require downloading a wallet which is not a solution. I agree that exchanges cannot be used as a wallet and I guess many don't even store their coins there but actively trade them. We can't blame them too as they keep depositing and withdrawing and such unseen hacks make them lose their money. Active traders are mostly at the losing end.

[vit05]

Cryptopia was not very comfortable with trading and holding Ethereum in its platform. That's why Ether was once delisted from Cryptopia. They always claimed that ETH was very vulnerable to hacking and Cryptopia didn't wanted to hold ETH or tokens from the users. But Cryptopia had to list that coin again as the customers demanded it and petitioned for its inclusion. And in the end, ETH relisting resulted in the complete liquidation of the exchange.

Do you have the link that supports what you say? Who said that would not want to list ETH? One of the owners? Or is it just a guess?

I find this claim quite curious. I do not think it could be true, I believe that all the exchanges in the list of the 100 largest have ETH. This is not a problem of the coin, but of failure in the security of the company.

[Vishnu.Reang]

Cryptopia was not very comfortable with trading and holding Ethereum in its platform. That's why Ether was once delisted from Cryptopia. They always claimed that ETH was very vulnerable to hacking and Cryptopia didn't wanted to hold ETH or tokens from the users. But Cryptopia had to list that coin again as the customers demanded it and petitioned for its inclusion. And in the end, ETH relisting resulted in the complete liquidation of the exchange.

Do you have the link that supports what you say? Who said that would not want to list ETH? One of the owners? Or is it just a guess?

I find this claim quite curious. I do not think it could be true, I believe that all the exchanges in the list of the 100 largest have ETH. This is not a problem of the coin, but of failure in the security of the company.

I read the thread here:

https://www.reddit.com/r/CryptoCurrency/comments/4ot7zq/cryptopia_delisting_eth/
https://twitter.com/cryptopia_nz/status/744344840515649536?lang=en

I can't vouch for the veracity of the claims being made on that thread. The detailed discussion was going on in the Cryptopia forum, but that forum thread can't be accessed now.