New Zealand’s Cryptopia Hacked- $3.2 Million Liquidated

BLockchain data company Elementus has publically stated that at least $3.2 million of the Cryptopia hack stolen crypto has been liquidated thus far.

“Cryptopia update as of this morning, the hackers have liquidated $3.2m in tokens, with the bulk of that going to Etherdelta.”

January 15th saw the initial report from Bitcoinist about the security breach, stating only that ‘significant’ losses were had. It was revealed almost two weeks by Elementus that the attack was ongoing with 17,000 wallets drained of 1,645ETH throughout the Cryptopia exchange. Some hacked wallets continued receiving funds even as they were being compromised.

It was later concluded through blockchain data that some users continued depositing into their Ethereum wallets even after Cryptopia lost control to the hacker(s).

The exchange has since remained silent on the matter.

The cryptocurrency exchange EtherDelta was used to liquidate a majority of the stolen funds. This exchange also experienced a security breach in late 2018 when someone was able to spoof its domain. Its problems continue.

The SEC has recently pressed formal charges against founder Zachary Coburn for not registering the exchange as a national securities exchange.

Stephanie Avalkin, Co-Director of SEC’s enforcement arm, had this to say on the matter:

“EtherDelta had both the user interface and the underlying functionality of an online national securities exchange and was required to register with the SEC or qualify for an exemption.”

Of which they did neither.

A recent report from Bitcoinist stated that Binance has frozen ‘some of the funds’ that were stolen during the Cryptopia hack. Binance CEO Changpeng Zhao confirmed via tweet:

“Just checked, we were able to freeze some of the funds. I don’t understand why the hackers keep sending it to Binance. Social media will be pretty fast to report it, and we will freeze it. It’s a high-risk maneuver for them.”

https://twitter.com/cz_binance/status/1085511601665368065

Binance has suffered some fallout on social media after a twitter user was able to detect the transaction where Binance’s own surveillance system did not.

https://twitter.com/Crypto_Bitlord/status/1085515544172814336

With the CEO engaging in this conversation further by saying:

“It’s quite easy to generate a brand new address. We (and no one) recognize every transaction out there. We already have very in-depth and detailed blockchain analysis.”

It is worth wondering why centralized exchanges continue to thrive (or were even made at all) if they are unable to stop the most predictable problem while capitalizing on a decentralized product.

Bitcoin (BTC), Ethereum (ETH), XRP (Ripple), and BCH Coin Price Watch (Feb 6th)

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