Cryptopia Turns to a U.S. Court for Account Holder Data Protection

Cryptopia

In the latest development over its security breach, cryptocurrency exchange Cryptopia has filed for bankruptcy protection in the U.S.

The New Zealand-based exchange, which has been dealing with the fallout of a January 2019 hack, went into liquidation and stopped all trading earlier this month. Cryptopia’s assigned liquidator, Grant Thornton, then petitioned the Southern District of New York’s bankruptcy court to seek recognition of this liquidation and protect exchange data stored on servers by a firm in Arizona.

Per a report from Bloomberg, the unnamed firm had terminated its agreement with Cryptopia and was seeking $2 million in compensation for its services. Cryptopia’s liquidators secured the bankruptcy order from the Southern District of New York, ensuring that the firm’s data are intact through a provisional relief that will last until June 7, 2019.

“The interim order preserves the Cryptopia data, which includes a SQL database containing all account holders’ individual holdings of cryptocurrencies and the account holder contact details,” the update from Grant Thorton reads. “Without this information, reconciling individual holdings with the currencies held by Cryptopia will be impossible.”

This development closely follows news that Cryptopia’s founder has launched a new exchange.

This article originally appeared on Bitcoin Magazine.

Tether and Bitfinex Ask New York Attorney General for Fund Accessibility

Gavel

Attorneys for Tether and Bitfinex are hoping to get the former access to its reserves amid a legal dispute with New York Office of the Attorney General (NYOAG).

In a letter sent to the New York County Supreme Court, attorneys representing iFinex (the parent organization of Bitfinex) and Tether took issue with the restrictions that had been placed on Tether’s transactions with related parties as part of an ongoing case against them, stating that the NYOAG had no basis for disallowing tether (USDT) holders and other affiliated entities from redeeming their tokens.

The development brings yet another twist to the ongoing dispute between the parties. In April 2019, the NYOAG applied for a court order to investigate Bitfinex for “ongoing fraud” totaling $850 million, using funds from Tether to mask massive losses. As part of the case, the NYOAG had filed an injunction seeking a restriction on related parties from accessing any of their funds in Tether’s reserve for at least 90 days.

The NYOAG’s argument is simple; if Bitfinex is allowed to continue drawing funds from Tether, with no assurance of repayment, then there’s a significant possibility that these funds will never be recovered.

On the other hand, Bitfinex maintains that the NYOAG has no legal basis or authority to probe its business.

In this recent letter sent to the court, iFinex’s attorneys noted that the two sides have been unable to reach a consensus on what Tether should be allowed to do with its holdings. The respondents also expressed their concern that the injunction sought by the NYOAG could have significant effects on Tether’s operations and financial strength.

“While Tether does not anticipate that it will suddenly become unprofitable, OAG’s language would potentially require the company to cut off salary and other ordinary course payments in any given period if, for whatever reason, there was insufficient profit,” the document reads.

As a compromise, the respondents’ attorneys asked that the injunction be reduced to 45 days. They also want affiliated entities to have the ability to redeem their tokens within that period.

This article originally appeared on Bitcoin Magazine.