Cryptocurrency has now become a prominent financial field in the economic zone. People from all over the world have been showing immense interest in buying and selling of cryptocurrencies. Besides this, they are actively taking interest to know about the crypto coin market and many other important topics that are related to cryptocurrency. Besides knowing about digital currencies, you must be knowing about well-known crypto exchanges like Binance, Bitfinex, Gemini, Kraken, KuCoin, and many others. But today, we are not going to emphasize any of these crypto exchanges. Rather, we will let you know about the demise of Cryptopia, a crypto exchange of New Zealand.

The confirmation about the failure of this crypto exchange came after a message. The cause of this crippling exchange happened when in January attackers get away with cryptocurrency worth of $16 million from its wallets. According to the message that came from this exchange, it revealed about the management efforts in minimizing the cost and to make the business profitable by returns. Besides this, it also read about the liquidators’ appointment for stakeholders, customers, and staff.

Before the demise of Cryptopia, the trade was restarted in March, but very few crypto assets around 40, were secured to be underpinned. Before Cryptopia became a target of the attack, it was holding around a number of crypto assets approximately around 500. The fall of this crypto exchange is also counted for the process of liquidation that seems to be slow-moving. And this, of course, made Cryptopia users frustrated. In January, a security breach resulted in losses prompting Cryptopia exchange to go offline.

Demise Of Cryptopia

Before falling down, Cryptopia had been a prosperous firm that made its debut in the year 2014. Adam Clark and Rob Dawson were two of the pair founders behind this crypto exchange launch. After not getting desired success with other exchanges, these pair came up with the idea of Cryptopia as a pastime. Both these duo founders left their job to focus on the operation of their firm fully, at the same time during in 2017, when the value of Bitcoin skyrocketed. In 2018, Cryptopia experienced a successful business surge with the maximum number of staff and worldwide million users.

Understanding Cryptocurrency And Cryptocurrency Exchange

Before we carry on our discussion on the demise of Cryptopia, let us re-introduce the concept of cryptocurrency and cryptocurrency exchange, especially for those who are new to the crypto world. Starting with cryptocurrency, it is a virtual or digital asset like Bitcoin, Ripple, Monero, Ethereum, Neo, and many more. Two of its prime objective is to provide security and anonymity for the transactions. The technology used behind it is cryptography. While discussing cryptocurrency, it is hard to ignore blockchain technology, where most of the cryptocurrencies operate on it. It all indicates no intervention from the central power. Also, there is no need for any intermediary medium like a bank for the P2P transactions. The performance of these digital assets can be analyzed through the cryptocurrency market ranking chart.

Now coming to cryptocurrency exchanges like Coinbase, Binance, Kraken, Bittrex, and Cryptopia, then these can be explained as online platforms where trading of cryptocurrencies are done via trading pair. These exchanges take the onus of keeping funds of the users for trading by keeping them into custody. But these currencies do face the risk of hacking. The demise of Cryptopia can be quoted as an example in this regard.

Hacking That Became The Cause For Cryptopia Downfall

The demise of Cryptopia came due to hacking that happened in January. There was a social media announcement by Cryptopia sharing the experience of a major breach of security indicating a heavy loss. The hacking led to the suspension of trading services. It also prompted a police investigation that resulted in the closure of the Cryptopia Colombo Street headquarters.

This crypto exchange faced criticism for unscheduled maintenance which led to its shut down. According to sources, the hacking was active from January 14 to 17. However, there was again no respite from hacking that again returned after many days.

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