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Millions lost as NZ police battle to recover crypto-currency exchange funds

Police in New Zealand are battling to recover funds lost during the security breach at Cryptopia, with media suggesting the figure to be in the ‘millions’.

James Henderson Jan 18th 2019 A-A+
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Police in New Zealand are battling to recover funds lost during the security breach at Cryptopia in Christchurch, New Zealand, with media speculation suggesting the figure to be in the ‘millions’.

A range of media outlets, driven by increased social media chatter, are reporting losses ranging from $2.5 million to as much as $11 million, despite a lack of official confirmation.

At one end of the scale, Decrypt is reporting losses of around $2.5 million, while Finder is suggesting the damage to be as high as $11 million.

“Police are not yet in a position to say how much crypto-currency is involved, other than it is a significant amount,” a police statement said. “The inquiry is still in its very early stages and police are continuing to work with Cryptopia to establish what has happened and how.

“A priority for police is to identify and, if possible, recover missing funds for Cryptopia customers; however there are likely to be many challenges to achieving this.”

The police also slammed widespread news reports that the Cryptopia was ‘stormed’ during an investigation on Wednesday, as reported by Reseller News.

“We would also like to make clear that Cryptopia are cooperating fully with the investigation team and a media report that police ‘stormed’ the building today is entirely incorrect,” the statement added.

Police said “a large team”, including Canterbury CIB and specialist staff from the police High Tech Crime Unit, have been assigned to the case.

“There has been a visible police presence at the company’s Colombo Street headquarters throughout the day [Wednesday] as police take the steps needed to progress the investigation,” the statement added.

“While police are unable to go into details about specific steps being taken at this stage, we can say that our focus includes commencing both a forensic digital investigation of the company, and a physical scene examination at the building.”

In addition, police also stressed that Cryptopia are “cooperating fully” with the investigation team.

“We are dealing with a complex situation and we are unable to put a timeframe on how long the investigation may take,” the statement said.

“We are also aware of speculation in the online community about what might have occurred. It is too early for us to draw any conclusions and Police will keep an open mind on all possibilities while we gather the information we need.”

As reported by Reseller News, Cryptopia told users that it had suffered a “security breach” on January 14, specifically impacting the Cryptopia Exchange and resulting in “significant losses”.

Police were advised late on Tuesday evening of the issue, with the platform currently in maintenance mode, the website down and trading suspended.

Established in 2014 by founders Rob Dawson and Adam Clark, the crypto-currency exchange has over two million global users, facilitating deposits, trading and withdrawals of major coins.

Cryptopia also claims to have access to “dynamic charts, live coin information, world class service and the world's largest range of coins”, according to the company’s website.