New Zealand cryptocurrency exchange Cryptopia remains in maintenance mode early into the morning local time on Wednesday as the company sorts out a reported hack. The incident was announced the prior day by the Cryptopia team on their official Twitter account. As the situation plays itself out, the exchange promised to provide all mattering updates to users.
The Cryptopia team left the following message after the hack:
Hi Cryptopians,
We apologise for the delay in keeping you updated and appreciate your patience.
Yesterday 14th January 2019, the Cryptopia Exchange suffered a security breach which resulted in significant losses. Once identified by staff, the exchange was put into maintenance while we assessed damage.
Staff then notified and involved appropriate Government Agencies, including the NZ Police and High Tech Crimes Unit who are jointly and actively investigating the matter as a major crime and they are assisting us with advice.
Until this has been carried out, The Cryptopia Exchange will remain in maintenance mode, with trading suspended. We are committed to getting this resolved as quickly as possible and will keep you all updated every step of the way.
Thank you,
The Cryptopia Team
“2018 was a record year for exchange hacks, with over $856 million worth of crypto stolen from exchanges according to research conducted at Ledger. Hackers are getting more sophisticated every day, and the Cryptopia hack is evidence that this trend will continue into 2019. Its critical that consumers use these hacks as learning opportunities and proactively protect themselves by taking direct control of their assets”
The New Zealand police issued a statement on Wednesday, January 16th, which confirmed they have been assigned to investigate the case of the multi-million dollar theft.
“What’s striking about this episode isn’t necessarily that the hack occurred, but, rather, that Cryptopia was caught totally unprepared in how it should handle the incident,” said Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading exchange and surveillance technology that powers global equities, derivatives, and cryptocurrency exchanges.
“A 48-hour maintenance period wasn’t the right call, and the move has stoked questions among the public as to whether this fiasco was really a hack, or, instead, if it was potentially an exit scam. In the end, exchange operators need to have plan in place. God forbid that your exchange is hacked, you really need to have a procedure in place that both informs customers of the situation while doing everything possible to mitigate the damages,” explained Gardner. “Cryptopia is a textbook case of what not to do in a similar situation.”