Cryptopia Users Win battle, Court Defines Cryptocurrencies As “Property”

Priyanka Kulkarni
Priyanka Kulkarni, post-graduated in Business Administration holds worthy experience in market research and investment banking. She is passionate to flaunt her perception towards cryptocurrencies.
  • Cryptopia moved to Twitter to reveal the verdict by Justice Gendall J. The exchange highlighted that as per the judgment findings delivered by Justice Gendall J, cryptocurrencies are “property” defined in s2 of the Companies Act 1993.
  • The exchange has encompassed around 900 currencies including Bitcoin and was regarded as the primus theft in New Zealand history.
  • Justice Gendall notified in his judgment that he is satisfied that all the account holders by currency held their interests on the same terms as other account holders of that particular currency.

In January 2019, the Christchurch-based digital currency exchange Cryptopia faced a major hack that resulted in a huge loss of over $30 million that was around 15% of its client’s digital currency stock.

Immediately after the hack, Cryptopia started its liquidation in May 2019, with Grant Thornton firm as its liquidator.

Cryptocurrencies are “property”

Today, Cryptopia moved to Twitter to reveal the verdict by Justice Gendall J. The exchange highlighted that as per the judgment findings delivered by Justice Gendall J, cryptocurrencies are “property” defined in s2 of the Companies Act 1993.

Also, the cryptocurrency of the account holders was kept on various trusts, which were separated by the individual crypto-asset type. This proves that the Cryptocurrencies are owned by the account holders, not the asset of the company.

The biggest theft in New Zealand history

The exchange has encompassed around 900 currencies including Bitcoin and was regarded as the primus theft in New Zealand history. The company’s liquidators appealed to the High Court in Christchurch in March to know whether they own all the currencies kept in their accounts and whether the funds were debts that were ranked along with other creditors.

Per sources, the creditors were owed around $12 million along with $5 million of Inland Revenue and according to the conclusion of account holders, the creditors would get about half of what was owed by the exchange.

Justice Gendall notified in his judgment that he is satisfied that all the account holders by currency held their interests on the same terms as other account holders of that particular currency. Cryptopia was the only mere trustee to act as a separate trust for each individual cryptocurrency held on its platform.

The Judge also pointed out that to the best of his knowledge, this is the first time the New Zealand court came across this kind of cryptocurrency issue.

Cryptopia was launched in 2014 by two enthusiast programmers Rob Dawson and Adam Clark. The business uplifted swiftly in 2017 crossed 100 staff at its peak.

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