Cryptopia Hacked— Major Exchange Reports ‘Significant’ Losses.

Cryptounicorn
Jan 15 · 4 min read

Cryptopia, a well-known exchange from New Zealand just recently posted the alarming tweet below from their Official Twitter page at January 15th 12:00 AM. Cryptopia states that they have “Suffered a security breach which resulted in significant losses”. The exchange has been put into maintenance mode while the damages are being assessed.

https://twitter.com/Cryptopia_NZ/status/1085084168852291586

The exchange reports that the breach took place on January 14th, and that they alerted the New Zealand Police and the High Tech Crimes Unit and that the crime is under active investigation.

The exchange frequently ranks in the top 75 by trading volume and is home to over 800 trading pairs.

The Possible Damages

Cryptopia has not at this time officially announced any estimate of the losses. However is appears that a large Ethereum transaction took place 44 hours ago that withdrew 19,390 Ether ($2.45 Million USD) from Cryptopia’s hot wallet to an unknown wallet. A tweet from Whale Alert also indicated 48 million Centrality (CENNZ) tokens (worth $1,176,596 USD) was also transfered 44 hours ago very close to the Ether withdraw.

Cryptopia’s hot wallet: https://etherscan.io/address/0x5baeac0a0417a05733884852aa068b706967e790

It is unknown at this time if there are any other Cryptocurrencies affected by the breach. But when attempting to visit Cryptopia’s website, the following message is found:

The First Major Exchange Hack of 2019

It was reported by Coin Desk that in the first 9 months of 2018, nearly $1 Billion USD worth of Crypto funds were stolen in major security breaches setting a record for most funds stolen from exchanges in a year. This breach of Cryptopia’s exchange unfortunately marks the first major exchange to suffer such a security breach in 2019. Due to the fact that cryptocurrencies cannot be reversed, often major hacks result in substantial losses for exchange’s users and many times cause the exchanges affected to have to close their doors.

As more and more exchanges fall victim to these hacks, it is becoming apparent that perhaps centralized exchanges may need further regulation in order to ensure rigid security practices are enforced to protect user’s funds. Perhaps decentralized exchanges could be the answer to prevent such breaches in the future.

In order to protect themselves from losses, it is advised that user’s avoid keeping their funds on exchanges when at all possible, and that they keep them in a secure wallet. Hardware wallets such as Ledger, Trezor, and KeepKey are well reviewed means of protecting Cryptocurrencies and Crypto Assets from being hacked.

Conclusion

It is unknown at this time if users will be able to recover funds held on the exchange, or if this breach could mean the end for Cryptopia. After an extended bear market in Cryptocurrencies, it is an especially unfortunate disaster for a user to find themselves victim of an exchange hack. After the Mt. Gox hack in 2014, it has taken years for users to get any compensation. As Cryptocurrencies continue to gain ground, it is inevitable that other exchanges will fall victim to hacks, and that this certainly will not be the last.

Feel free to comment your thoughts about the Cryptopia hack below.


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Cryptounicorn

Written by

I’m a crypto-enthusiast that’s deeply immersed in the space. I write about exciting new tech coming from the Cryptocurrency space. Writer for Altcoin Magazine.

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