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Update for Cryptopia Claimants and Stakeholders 5 March 2024

On 1 March 2024, Justice Palmer released his judgment regarding the Liquidator's application for legal directions heard in November 2023 at the Wellington High Court.

Key takeaways

  • This judgement and associated orders granted by the judge confirm the way the liquidators intend to return Cryptocurrencies to account holders
  • The first distribution will be the Interim distribution to Qualifying Bitcoin and Dogecoin account holders which is expected to be made within the next 3 months
  • After the first distribution we will follow the approved process including giving notice of any cut-off dates before distributing to account holders the remaining Bitcoin, Dogecoin and all other cryptocurrencies of sufficient value by the end of 2024. After this primary distribution of Cryptocurrencies that are of sufficient value, there may be an additional top-up distribution to account holders, allowing them to receive up to 100% of their holdings.  If this supplementary distribution takes, place it should occur before the middle of 2025
  • We encourage all account holders to read the Judgment below and the sealed orders which outline the principles for all upcoming Cryptocurrency distributions
  • For those account holders who haven't registered on the claims portal, we encourage you to do so 

General information

As previously communicated to account holders, those having trouble with the Claims Portal, need to raise a ticket through the Cryptopia Customer Support Portal . This support portal is separate from the claims portal and can be accessed by any account holder, provided they register and click the “Sign Up” button on the page.

Lastly, the only official communication from the liquidators will be sent from the no-reply@cryptopia.co.nz email. We will not send any communications relating to your claim from a different address. Any communications not sent from this email are not from us and may be scams. 

With the announcement of distribution plans the Liquidators expect to see an increase in bad actors trying to interfere in the Cryptopia claims process. We must remind account holders to remain ever vigilant in regards to their security.   

We would like to remind all account holders that the only channels that we use to communicate with account holders about Cryptopia liquidation are:

If you are unsure whether a communication is an official communication from us, please raise a helpdesk ticket in Zendesk.

Judgement and Sealed orders

The full judgement and sealed orders can be found at the below links:

A  summarised version of the orders made by the Court is provided below:

  1. Claim Valuation Date: The entitlement of each account holder of the respective cryptocurrency trusts shall be calculated as of 14 May 2019, pending further order of the Court.

  2. Distribution Process: The Liquidators are permitted to make distributions of cryptocurrency held on trust to account holders, subject to certain conditions including:
    • the submission of claims before ‘cut-off date’ in line with section 3 of the update found here includes orders that allow for top-up distributions from unclaimed holdings up to 100% of account holdings after some time  
    • completion of identity verification
    • deduction of allocated incurred and projected future costs
    • reimbursement of BTC and DOGE trusts and the Company for funding the liquidators’ costs
    • Assessment of the realisable value of trust property
    • Setting a De minimis value threshold for distribution
    • Allowing the distribution to be in in fiat currency for jurisdictions where it is or may be illegal to use or transact cryptocurrency.

  3. Review Process: If the liquidators reject a claim in whole or in part, these orders set out a process where if an account holder is dissatisfied with the Liquidators’ decision with respect to their claim, the account holder may request a review to determine if the decision should stand.

  4. Low/No Value Trusts: The liquidators are not required to take any steps in connection with the distribution of any cryptocurrency that has no or low realisable value and thus no basis for contribution to the costs of distribution.

  5. Low Account Balances: Account holders who have an account balance equivalent to or less than the actual or anticipated cost of the trust administration as at the date of any proposed distribution are deemed to have no right to participate in the distribution of cryptocurrencies by the liquidators.

  6. Allocation of Trust Administration Costs to Account Holders: The liquidators are permitted to allocate the incurred and future costs and expenses of and incidental to the recovery, preservation, protection and distribution of the cryptocurrency available for distribution by trust and, within each trust, by each account holder.
  7. Providing for Future Trust Administration Costs: The liquidators are permitted to withdraw from each trust holding cryptocurrency of realisable value a quantity of cryptocurrency sufficient in value in the aggregate to meet the liquidators’ projected costs and expenses to complete (further) distributions of cryptocurrency and to dispose of any Unclaimed Holding as directed by the Court.

  8. Cost Reimbursement to BTC and DOGE Trusts (and the Company): After calculating the allocation of trust administration costs and expenses to each trust, the Liquidators are permitted to deduct from each trust holding cryptocurrency of realisable value, other than the BTC and DOGE trusts respectively, a quantity of cryptocurrency to reimburse the BTC and DOGE trusts and Cryptopia Ltd for the trust administration costs incurred to the date of this order.

  9. Recoveries of Stolen Cryptocurrency: The liquidators and Cryptopia can use the assets recovered by the FBI for further tracing and recovery actions. If more stolen cryptocurrencies are recovered, they can be applied in the following order:
    • Reimbursement of recovery costs to the trusts and account holders who contributed to hack recovery costs, proportionate to the amount contributed.
    • Further distribution to account holders in fiat or cryptocurrency, proportionate to their holding in the stolen cryptocurrency at the date of the hack, up to a maximum of 100% of the value at the hack, considering any later withdrawals.
    • Any remaining balance forms part of the unclaimed holdings.
  10. Post Appointment Deposits: The liquidators and Cryptopia can treat deposits of cryptocurrency to Cryptopia after the commencement of the liquidation being 14 May 2019 as mistaken deposits, held separately for the benefit of the intended account holder. Distributing these post-appointment deposits to the intended account holder upon receipt of proof of the deposit and valid payment details less any transaction costs and are not required to distribute post-appointment deposits to account holders who are not eligible account holders.

Claims process Deposits:

The liquidators are advanced in the development of stage '4a.' of the claims process:

# Process Details
1 Claims registration Allows the registration of account holders' details
2 Identity verification Verifies account holders' identities to the necessary verification standard
3 Balance acceptance  Provides account holders the opportunity to agree that Cryptopia records represent amounts due
4a Asset Distribution – Wallet Address Collection Allows eligible account holders to submit wallet addresses for each balance qualified to participate in Asset distribution
4b Asset Distribution – Crypto-asset Return Returns account holders assets proportional to distribution calculation

Wallet Address Collection will be launched for those qualifying and registered Bitcoin and Dogecoin holders in the coming weeks.