Cryptopia Owes At Least $2.7 Million to Its Creditors

Financially troubled crypto exchange Cryptopia owes $2.738 million to its creditors, the first report by 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 for outstanding salaries 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 was demanding $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 . Moreover, the tax liabilities of the exchange is still unknown as the local tax authorities recently initiated an audit.
Earlier this week, that the liquidators filed for bankruptcy 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.