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Ex-Cryptopia Staffer Admits To Stealing USD 176K In Crypto

Ex-Cryptopia Staffer Admits To Stealing USD 176K In Crypto
Source: iStock/Dimitris66

In another round of controversies surrounding New Zealand’s collapsed crypto exchange Cryptopia, a former staffer has admitted to stealing customer data and close to NZD 250,000 (USD 176,000) worth of crypto from the platform where he was previously employed.

The unidentified man appeared in the Christchurch District Court today before Judge Gerard Lynch, admitting to the charges of theft by a person in a special relationship, and theft of more than NZD 1,000 via his lawyer, as reported by local news site Stuff.co.nz.

A summary of facts from Monday’s hearing suggests the former staffer allegedly reached out to the company’s management to discuss his concerns related to the security of private keys for a number of cryptoassets. He made unauthorized copies of private keys from Cryptopia’s wallets and saved them on a USB storage device. The former employee then took the device home and uploaded the information to his personal computer.

Cryptopia was reportedly once again hacked last February, allowing perpetrators to steal a further NZD 62,000 (USD 44,000) worth of crypto after a January 2019 attack enabled criminals to steal an estimated USD 30m in cryptoassets. The February 1 attack gave hackers access to a wallet that was dormant since the January 2019 hack and belongs to US blockchain business Stakenet. In total, the wallet was estimated to comprise about NZD 2.7m worth of stakenet (XSN), which is the native token of Stakenet.

The former staffer’s charges are not related to either of the two hacks.

The company that owns Cryptopia was placed into liquidation in May 2019. Since then, the process has been managed by accountancy firm Grant Thornton. Following the liquidation, Cryptopia scrapped its employees’ contracts, but the former staffer kept his copies of the private keys.

Last September, a former Cryptopia customer e-mailed a representative of Grant Thornton, claiming he had accidentally deposited bitcoin (BTC) into his old wallet, and asked for the crypto to be returned. A subsequent review of the platform’s wallets revealed BTC 13 (USD 447,000) had been withdrawn from various wallets without Grant Thornton’s authorization.

On September 10, the former staffer admitted to stealing the bitcoin and other cryptoassets worth some NZD 100,000. He claimed he had returned some of the obtained crypto, and offered to reimburse the remainder. Following this, the former employee returned BTC 6 and asked for assurances that, if he returned the remaining crypto in his possession, he would not be charged with theft.

The same month, the man admitted to New Zealand’s police that he had illegally copied the keys from Cryptopia’s resources, and stole the crypto.


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