“Significant Concerns” Raised Over Cryptopia Bankruptcy Handling

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  • Cogito, a group representing Cryptopia claimants, has expressed significant concerns about the bankruptcy proceedings and has offered to buy coins from customers 
  • Cryptopia fell into bankruptcy in 2019 after two hacks, and the recovery process has been plagued by delays, frustrating claimants
  • Cogito proposed buying up to €500 in exchange for 500 COG stablecoins, pegged to the Euro

A group of professionals working on behalf of beleaguered Cryptopia claimants has stated that it has “significant concerns” over how the bankruptcy is being handled and has made a proposal to claimants. The group, called Cogito, is offering to purchase the coins owned by former customers when the exchange collapsed into bankruptcy in 2019, including those labeled as having minimal value. Cogito says that the initiative is not just about financial recovery but also about restoring trust and confidence in the crypto community.

Four Years With No Resolution

Cryptopia fell into bankruptcy following two devastating hacks on the platform in 2019 which saw over $16 million worth of coins stolen. A battle over payouts has been fought ever since, and despite New Zealand courts ruling that the coins belong to the account holders, the recovery process has faced delays and limited progress, leading to frustration among claimants. 

In an email to claimants, Cogito says that while liquidator Grant Thornton has taken some positive steps, it has neglected certain crucial things, such as releasing the settlement proposal to claimants and failing in its duty to keep them up to date with the progress of the bankruptcy. In the email, Cogito summed up the damage being done as a result:

Because there is no opposing arguments to the liquidators actions the court in New Zealand have previously been agreeing to anything Grant Thornton has requested. Legal challenges to the way Grant Thornton has been dealing with things has been met with aggressive responses from Grant Thornton and their solicitors. In more recent months when the strategies of Grant Thorntan [sic] have been questioned in the courts of New Zealand, the judges in question have neglected to readdress the legal irregularities and continued to allow Grant Thornton to do as they wish.

COG Stablecoin Offered for Locked Coins

Cogito’s proposal aims to provide relief to Cryptopia claimants by acquiring their coins locked on the platform, offering an opportunity for assets of up to €500 to be exchanged for 500 COG stablecoins pegged to the Euro. Larger holders can opt to cash out at prevailing market rates.

Cogito adds that a court hearing over the matter is scheduled for 13 November, and it would like to have as many of the account holders signed off as possible by this time.

While Cryptopia Rescue support groups on social media express distrust in the legal process and the liquidator’s handling of the situation, Cogito’s initiative raises the possibility of a resolution, with the situation sadly echoing that felt by MtGox customers since 2014.