The New Zealand-based cryptocurrency exchange Cryptopia has been hacked on Monday January 14th. According to a statement from the company itself, there have been ‘significant losses’. Transactions on the blockchain suggest that the hackers got at least $3.6 million worth of cryptocurrencies, including 19 thousand ethereum.
Since the moment staff recognized the hack, the exchange has been closed down for maintenance. Cryptopia, government agencies, the New Zealand police and the High Tech Crimes Unit are involved in researching the hack. As long as Cryptopia is working with the police, the exchange will remain in maintenance mode. The exchange mentioned in its official statement that the authorities consider this hack ‘a major crime’.
It’s unknown how much coins have been lost by the exchange. Transactions found on Etherscan suggest that Cryptopia lost at least 19.309 ethereum, which would equal a current value of 2.5 million dollars. The amount was moved from a Cryptopia wallet around the alleged time of the hack. Another major coin transfer from around that time involved 48 thousand CENNZ, which is $1.1 million. Which would suggest that Cryptopia lost at least 3.6 million dollars, but the actual amount is likely to be a lot more.
The hack on Cryptopia is the second major incident of 2019, after Ethereum Classic suffered a 51% Attack just a few days ago. During the attack on the Ethereum Classic blockchain hackers obtained $1.1 million by using a method called ‘double spending’.
This incident should be a warning for investors. Don’t leave your coins on a centralized exchange. Cryptocurrencies should always be stored in a wallet to which investors have the public and private key. Only when you own a private key, an account can be restored. Without it, money is basically stored on a centralized server… in this case the wallet owned by Cryptopia.
One way to prevent such hacks, is to only trade on decentralized exchange on which you have access to your own private key. There are enough problems with crypto exchanges as it is right now, all you need to do is make sure you’re in control and not somebody else.
Also published on Medium.