Cryptopia Liquidators Begin Distributing $225 Million to Users Affected by 2019 Hack

After almost six years of waiting, users of the bankrupt cryptocurrency exchange Cryptopia are finally seeing compensation for their losses due to a massive hack in 2019. On December 20, 2024, the exchange’s liquidator, Grant Thornton, announced that it had begun distributing millions of dollars in cryptocurrency to over 10,000 verified account holders who were impacted by the breach.

The initial payouts, which took place over the past two days, have seen more than $225 million (NZD 400 million) distributed to users holding Bitcoin (BTC) and Dogecoin (DOGE). The distribution marks a major step forward in the ongoing liquidation process, which began after the hack nearly wiped out the exchange’s assets.

The payout is a key milestone in the liquidation of Cryptopia, a process that began in 2019 when the exchange was hacked for a significant amount of cryptocurrency, estimated at $16 million. Grant Thornton, the firm overseeing the liquidation, started the Cryptopia Claims Portal in 2020, giving affected users a platform to verify their holdings and file claims for lost assets.

The process, which has taken years due to complex legal and financial challenges, is now beginning to pay off for those who lost funds in the hack. As of now, verified holders of BTC and DOGE have received their share of the distributions, and more distributions are expected to follow in the coming months.

Next Steps in the Distribution Process

Following the first round of payouts, Grant Thornton indicated that the liquidation process would continue in phases. Future distributions will include the remaining Bitcoin, Dogecoin, and other cryptocurrencies owed to account holders. However, the liquidators also mentioned that some account holders might receive a top-up distribution after a cut-off date, allowing them to receive up to 100% of their lost funds.

In a statement, the liquidators highlighted that users who have not yet registered or verified their claims must do so by the designated cut-off dates in order to be eligible for future payouts. The liquidator also encouraged all remaining Cryptopia account holders to complete the necessary steps on the claims portal to ensure they don’t miss out on any further distributions.

“Further distributions for newly verified users are planned for the New Year,” Grant Thornton confirmed.

Cryptopia, founded in 2014, was one of New Zealand’s largest and earliest cryptocurrency exchanges. At its peak in 2018, the exchange had around 1.4 million registered users and was widely considered a pioneer in the crypto space. Cryptopia even launched one of the country’s first stablecoins, NZDT, backed by the New Zealand Dollar, in 2017.

However, in January 2019, Cryptopia fell victim to a devastating hack that resulted in the theft of approximately $16 million worth of cryptocurrency across various tokens. The hack prompted an immediate halt to trading on the platform and led to the exchange entering liquidation shortly thereafter.

In May 2019, Grant Thornton, the firm tasked with overseeing the liquidation process, revealed that the exchange owed $4.2 million to its creditors, further complicating the financial recovery efforts.

Looking Ahead: A Slow But Steady Recovery for Cryptopia Users

For many Cryptopia users, the road to recovery has been long and frustrating. Despite the challenges, the distribution of $225 million to BTC and DOGE holders is a major step forward, and future payouts are expected to offer more hope to those affected by the hack.

As the liquidation process continues, Grant Thornton remains focused on distributing remaining assets to verified users. With further payouts expected in the New Year, there is a glimmer of optimism that the majority of affected users will eventually recover their lost funds.

While the Cryptopia hack remains one of the most significant incidents in the history of cryptocurrency exchanges, the ongoing liquidation process serves as a reminder of the complexities of crypto asset recovery. As the space matures and regulations evolve, incidents like these highlight the need for enhanced security measures and more robust systems to protect users from similar breaches in the future.

Cryptopia’s liquidation process is finally starting to deliver results for users who suffered from the 2019 hack, with millions in cryptocurrency distributions now being made. Although the journey has been long, the recent payout represents a significant milestone in compensating those affected by the breach. As the process unfolds in 2025, it is expected that more users will receive compensation, offering a partial resolution to one of the crypto industry’s most notable security failures.