Cryptopia Owes At Least $2.7 Million to Its Creditors

Financially troubled crypto Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term Cryptopia owes $2.738 million to its creditors, the first report by the liquidators of the exchange revealed.

In the audit report published on Friday, Grant Thornton New Zealand detailed that the New Zealand-based exchange owes at least $1.37 million to 69 unsecured creditors, while two secured creditors - Dell NZ and Coca Cola Amatil (NZ) - are in line to receive over $912,000, with an expected deficit of $1.63 million.

The exchange also defaulted in paying salaries and perks to its employees, to whom it now owes $207,000 in outstanding wages and holiday pay. There is also an unsecured debt of $177,000.

The figure will increase

Interestingly, the liquidators did not mention any debts to the exchange’s data provider in Arizona, which demanded $2 million for its services, according to a Bloomberg report.

However, the amount owed by the exchange is likely to rise as the liquidators did not factor in the refunds the customers of the failed exchange are owed. Moreover, the tax liabilities of the exchange are still unknown as the local tax authorities recently initiated an audit.

Earlier this week, Finance Magnates reported that the liquidators filed for Bankruptcy Bankruptcy Bankruptcy or insolvency constitutes a legal term and refers to being unable to repay debts. A business and a person can declare bankruptcy. When a person or company claims bankruptcy, it is described as a voluntary bankruptcy, and when your debtors force you into bankruptcy, it is referred to as involuntary. A voluntary bankruptcy occurs when the debtor or borrower, the party that owes the money files with the courts. Involuntary bankruptcy happens when your credits file a petition with the co Bankruptcy or insolvency constitutes a legal term and refers to being unable to repay debts. A business and a person can declare bankruptcy. When a person or company claims bankruptcy, it is described as a voluntary bankruptcy, and when your debtors force you into bankruptcy, it is referred to as involuntary. A voluntary bankruptcy occurs when the debtor or borrower, the party that owes the money files with the courts. Involuntary bankruptcy happens when your credits file a petition with the co Read this Term protection in a court in the United States to protect Cryptopia’s customer data stored on the server of a US company.

“The Company held cryptocurrency in wallets by cryptocurrency and has a database detailing the customer transactions and balance allocated to each customer. We are currently gaining access to the database to undertake a reconciliation of the holdings against the customer balances. Until the user balance database is reconciled with the crypto-asset wallets operated by the company, we cannot confirm the value of Customer holdings.”

According to the report, the exchange had $691,229 in cash at the time of liquidation along with a loan of $150,000. Though the total face value of the exchange’s fixed assets is over $1.3 million, around $242,000 can only be fetched after liquidating them.

“The rapid growth of Cryptocurrency in early 2018 meant the Company scaled up to manage the increased level of trading. To manage this the Company entered into a number of long term, high-cost contracts to provide the infrastructure necessary to trade at this level. Unfortunately, trade volumes, from which the Company earned its revenue, reduced significantly through late 2018,” the liquidators stated.