Expert on Cryptopia hack: 'NZ police has no clue what's going on'

05 Feb, 2019 | Updated: 05 Feb, 2019
Expert on Cryptopia hack: 'NZ police has no clue what's going on'

New Zealand exchange Cryptopia is currently still under siege by local police in an attempt to track and trace the $16 million worth of cryptocurrency that was stolen from the exchange in January. 

However, it appears that the local police may not be well equipped or trained to handle such a hack. That is according to Alex Sims, an expert in corporate law. 

Sims commented on the matter saying that the local police were in fact "struggling" to deal with the cryptocurrency crime, also mentioning that the investigation was not being handled well, according to Stuff.

Read more: The Cryptopia Hack Timeline: as it happened

Sims explained that local regulators were struggling with the handling of cryptocurrencies, unlike countries such as the US and Japan that have set up secure custodial services. Sims said that "no one seems to have a clue what's going on. But this hasn't come out of the blue. There has been a lot of dialogue in recent years about the security of cryptocurrency and where to store the digital wallets."

Read more: Cryptopia compromised by another attack, $180,000 worth of ETH stolen

Cryptopia Co-founder Pete Dawson also commented on his silence with regards to the hack, claiming it was due to the police investigation, "Our team is giving police technical assistance and their advice to is maintain radio silence in case we inadvertently say something that might interrupt their investigation," Dawson said.

The latest issues brought up by Sims could halt any plans for the exchange opening up in February as originally mentioned by local police. 

Read more: New Zealand police state Cryptopia may reopen in early February

Fellow New Zealand cryptocurrency exchanges BitPrime admitted that they do not hold customer funds directly, but instead make use of an institutional custodian in cold storage. "Our own cryptocurrency reserves are held by an institutional custodian in cold storage, with US$100 million worth of insurance coverage, holding customer funds increases the risk, which can turn out disastrously", BitPrime chief executive Ross Carter-Brown said. 

The latest developments will not be good news for users who lost cryptocurrency on Cryptopia. However, the hack will prove a good case study for the prevention and investigation of future potential hacks. 

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