Former Employee of Cryptopia Pleaded Guilty of Stealing $170K Worth of Crypto

2 weeks ago

A man, who turned out to be an ex-worker at Cryptopia, confessed to stealing about NZ$250,000 worth of digital assets.

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An ex-Cryptopia staffer admitted he stole nearly NZ$250,000 or about $170,000. He pleaded guilty on two charges – theft by a person in a special relationship and theft of more than NZ$1,000.

How Did The Crime Occur?

A former employee of the non-functional New Zealand cryptocurrency exchange, Cryptopia, confessed to stealing about $170,000 worth of digital assets. According to the hearing at the Christchurch District Court on Monday before Judge Gerard Lynch, the man made an unauthorized copy of private keys from Cryptopia’s numerous wallets and saved it on a USB storage device.

Subsequently, he took it home and uploaded the data to his personal computer. It is worth noting that possessing the private keys to the wallets of the trading venue potentially provided him with access to thousands of digital wallets alongside $100M of numerous types of cryptocurrencies.

The first signs of the crime happened on September 3rd, 2020, when an ex-customer of the exchange said he deposited bitcoins into an old Cryptopia wallet by mistake and asked the funds to be returned.

The accounting firm Grant Thornton put the trading venue under review and established that 13 BTC had been illegally withdrawn following series of operations. Back then, this amount of cryptocurrency equaled $165,000.

On September 10th, the former staffer of Cryptopia contacted David Ruscoe and Tom Aspin of Grant Thornton and confessed that he stole the equivalent of that amount in BTC. Moreover, he admitted to swiping $7,000 worth of another digital asset.

The ex-employee returned some of the stolen virtual currencies and offered to pay for the rest. However, he was convicted and will be put on bail until sentencing on October 20th.

Cryptopia Got Hacked

In January 2019, the crypto exchange Cryptopia admitted that it was a victim of a hack. Its team was able to protect the venue to some extent. Although the exchange refused to reveal the actual amount stolen, the attackers still inflicted massive damage.

A considerable amount of 19,391 ETH (approximately $2.5 million by that time) was recently transferred from Cryptopia to an unknown wallet, which might indicate the size of the missing funds or at least a part of them.

Later that year, Cryptopia went into liquidation after $24M worth of cryptocurrencies were stolen following another hack. This represented 15% of the exchange’s virtual asset holdings and was regarded as the biggest theft in New Zealand history.

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