Legal Directions
In our statutory report issued on 12 June 2023, we reported that we would be filing application for directions (“the Distribution Application”) in the Court and we confirm on 31 July 2023 we submitted our application for directions to the Court in relation to the following:
- To agree the date at which the trust assets, and as such, account holders’ balances, are calculated;
- Approving a distribution model for the cryptocurrency to account holders including the allocation of costs against the trusts holding the cryptocurrency (costs to date and future costs);
- Setting a cut-off date for account holders to participate in the claims process;
- Confirming the approach to unclaimed cryptocurrency (if any), which could include the ability to use unclaimed cryptocurrency to reimburse costs allocated to account holders and if any remaining, reimburse account holders for cryptocurrency losses relating to the hack;
- Approval of a review process for account holders regarding any disputes arising from queries in claims balances;
- Permitting Cryptopia to take no steps in distributing certain cryptocurrencies that have low or no realisable value; and
- Permitting Cryptopia to take no steps to distribute cryptocurrency to account holders who have an account balance of less than the costs of the trust administration.
A brief initial hearing regarding the Distribution Application has been set down for 31 August 2023. At this hearing there will be a discussion about the steps leading to the full hearing of the Distribution Application. We will provide another update once a date for the full hearing has been set.
As part of the Distribution Application, the Court has already ordered the following:
- Peter Watts KC has been engaged as ‘amicus curiae’ (friend of the court), which means he will assist the Court in providing arguments for and against the liquidators’ proposed approach in the Distribution Application; and
- Jenny Cooper KC has been engaged to represent the interests of all known and potential unsecured creditors of Cryptopia.
A copy of the Court documents can be found at the links below:
Distribution Application
- Originating application for directions in respect of distribution of cryptocurrencies
- Affidavit of David Ian Ruscoe
- Consent to act for Jenny Cooper KC
- Consent to act for Peter Watts KC
Interlocutory application (representation and service)
Sale Application
The Court has made an order permitting us to convert NZ$5 million of cryptocurrency to meet the reasonable cost and expenses of and incidental to the protection, preservation, recovery, management, and administration of the cryptocurrencies.
Link to Court Order.
Update on Claims Process
We continue to follow the claim process previously reported.
| 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 |
We continue to encourage claims registration and continue to send reminder emails to those who are yet to engage. At the date of this update, 84.7% of users by value have interacted in the claims process in some way. However, a number of these account holders may have opened the email or clicked on the link to the portal but are yet to actively engage in registering their claim.
We encourage all account holders who have not yet registered with the Claims Portal to register, or for those that are partially through the process to continue, to ensure the maximum number of account holders are able to receive a distribution.
If you are having trouble with the Claims Portal, please 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.
Asset transfer
Later in the year we will invite qualifying account holders to provide us with their wallet address in preparation for a partial distribution. We anticipate that the partial distribution will be made to holders of BTC and DOGE over a certain value.
Further distributions of these and other cryptocurrencies will be made after the Distribution Application has been decided by the Court.
Where to go for updates
We will continue to update you as further information comes to hand and to provide updates on the claims process. Updates can be found on the Grant Thornton New Zealand website, as well as the social media channels for Grant Thornton and Cryptopia.
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