When the Cryptopia exchange was hacked in January, there wasn’t too much surprise from the cryptocurrency industry. The exchange was notorious for traders using the site to deal in either underrated gems or s**tcoins.
Since then, there has been a police investigation and little comment from Cryptopia. That is, until now. With Cryptopia announcing it is soon to reopen, users will finally get to see whether any of their bags are safe.
Exchanges have not been having a particularly good time of late. Not only have we seen the Cryptopia hack, we have also witnessed the death of the QuadrigaCX CEO with apparently no access to the cryptocurrencies stored on the exchange. Whilst this story rumbles on, Cryptopia has reacted quickly to its recent hack, at least compared to historical exchange hacks.
The most infamous hack of an exchange within the cryptocurrency space was the Mt Gox hack of 2014. Mt Gox at the time was possibly the largest and most well-known exchange thanks to its early mover advantage. Six months previous, Roger Ver attempted to dispel rumours Mt Gox was insolvent with this poorly timed video. The hack was so large and destroyed the trust of so many that the price of Bitcoin took years to recover. Clients of Mt Gox are still awaiting to see whether they will ever receive their funds back.
Bitfinex, another large exchange, also suffered a major hack, losing around 120,000 BTC at the time. This week, they announced that they had recovered 27.7 of the lost BTC, around 0.02% of the total stolen. This will be distributed amongst the victims of the hack. Whilst better than a kick in the teeth, it isn’t much.
Cryptopia is still yet to release any news on who’s accounts have been affected or whether the victims will be refunded. This all leads to either a bit of excitement or dread from those who stored their cryptocurrencies on the exchange. With around 9% of their total holdings being hacked, Cryptopia has the choice of either spreading this loss across all users, leaving just those that were affected to pick up the pieces, or consuming the loss themselves and passing none onto the clients.