Update: We have resumed trading on 40 trade pairs that we have quantified as secure. We will continue to expand this list as we clear more coins.
— Cryptopia Exchange (@Cryptopia_NZ) March 19, 2019
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14-15% Bitcoin Haircut
Cryptopia’s latest announcement followed a $16 million hack that took place on its exchange in mid-January this year. The exchange later revealed that it had lost 43.19-percent of its Litecoin and 14-percent of its Bitcoin holdings to hackers. Nevertheless, perpetrators managed to wipe off Cryptopia’s entire Ethereum reserves, leaving the exchange with no Ether coins to list.
Victims included individuals who reportedly lost their life savings to the said security breach. After Cryptopia reopened this week, some of them complained about a certain percentage of their crypto holdings missing. For instance, a Redditor logged into his account and noted that he had 15-percent fewer bitcoins than what he was holding before the hack. Excerpts from his statement:
“I logged in my account and got a 15% haircut for BTC. Heard eth has a haircut of 100%.”
Responders referred to an email issued by the Cryptopia office, stating that it would deposit Cryptopia Loss Marker (CLM) in place of the missing funds. The exchange will use CLM as a mean to assess an individual’s loss in New Zealand Dollar (NZD) following the hack.
Earlier, Cryptopia had confirmed that it would start rebating its customers through equitable logistics. The exchange had said:
“CLM is not a coin, it can’t be traded as yet, it is just a number in the database that represents the loss for each coin for each user in $NZD at the time of the event. There are still steps to take to ensure we are taking a legal path toward reimbursement.”
The move is similar to what crypto exchange BitFinex did after losing $71 million to hackers. Following the August 2016 theft, the firm had distributed so-called BFX tokens among the victims. In return, those clients had to bear a 36-percent bitcoin haircut. By April 2017, BitFinex had bought all the BFX tokens back.
About The Author
Yashu Gola has been working as a cryptocurrency analyst/journalist since 2013. He is an information technology graduate, a cryptography junkie, a filmmaking enthusiast, and an avid reader of Jon Erickson, Agatha Christie, JK Rowling, and Isaac Asimov.