Screenshot of Cryptopia site, after the hack.

Police investigating the hack of millions of dollars of cryptocurrencies from Christchurch digital assets exchange Cryptopia, told investors the company could be back up and running within the next couple of weeks.

At the same time, however, there is evidence cryptocurrencies are still being stolen.

Cryptopia was placed in “maintenance mode” on Jan. 14, after hackers stole an estimated $20 million – or possibly more – of various cryptocurrencies. Since then, coins thought to be from the digital wallets of Cryptopia investors, have turned up in unidentified digital wallets, and on other global cryptocurrency exchanges.

Many investors have been worried there has been no news for more than a week about when – or whether – they might get any of their cryptocurrencies back. There is also concern they can’t get at vital trading records they need for tax purposes.

Now a letter from NZ Police’s “investigations team – Operation Crypto”, has emerged dated Jan. 25. Sent to a customer with funds in Cryptopia, the letter says that although “there is no confirmed date when the company will resume business operations”, this might occur in early February.

Police are working to enable the company to communicate directly with customers, the letter said. However, there’s no suggestion of any speedy return of funds. “This is – and will remain – a protracted and complex investigation.”

Meanwhile, overseas sources suggest the Cryptopia hacker may still be targeting the company. A post on the blog site earlier this week suggested an additional US$180,000 of the second most popular cryptocurrency, Ether, has recently disappeared from thousands of Cryptopia customer wallets.

The blog suggested some of the wallets are being hacked for the second time. This meant some investors must be unaware of the problems at Cryptopia and had put more money in, only to have it siphoned off again.

Cryptocurrency and tax specialist Campbell Pentney, from law firm Bell Gully, says investors are right to be concerned over the security of their funds and assets still held by Cryptopia.  

“If it is correct that the theft of funds is ongoing, then that suggests Cryptopia no longer has control over their own wallets. That then raises questions over the security of other assets held by Cryptopia, such as bitcoin.” 

In the absence of updates from Cryptopia, Pentney says investors are left to speculate.  

“It is also a situation where fraudsters can take advantage of the situation and trick investors into losing more money.  The end result is that nobody knows who to trust and everything is treated with scepticism.”

Nikki Mandow was Newsroom's business editor and the 2021 Voyager Media Awards Business Journalist of the Year @NikkiMandow.

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