The Cryptopia exchange seems to be having some problems. At press time, over 100 different coin markets are disabled. Many of the coins have been disabled for months. We were also told by the Goldcoin developers that they were asked to pay 1.3M Goldcoins to re-enable the market.
According to those same developers, the cause of the problem was a double spend attack. Goldcoin’s wallet had a vulnerability and when the developers noticed higher than normal volumes on Cryptopia, they figured something was going on. So, they informed Cryptopia and patched the wallet. That seemed to fix the issue but not before the attacker managed to get away with significant amounts of different coins.
It is unclear at this time if users of those coins are able to withdraw them from Cryptopia or not. At the least, it seems GoldCoin users are unable to withdraw their coins. It is also unclear how many of the other coins were shut off because of the attack and how many are due to other issues. Some coins list wallet updates and network issues as the reason for them being down, while others have no explanation at all. Some coins have dates on when they shut down, while others have no dates at all. October and November were most commonly listed as the shut down date, but some go all the way back to July.
All of the coins are smaller. There aren’t any top ten cryptocurrencies disabled. It includes the likes of Einsteinium, MarxCoin, GameCredits, AurumCoin and of course, GoldCoin.
The GoldCoin team has offered Cryptopia over 300k GoldCoins for the trouble their wallet may have caused but apparently have not heard back as of yet. That is a far cry from the 1.3M GoldCoins that Cryptopia has allegedly asked for, but is still a significant amount, sitting around $7000 after today’s market-wide drop.
We reached out to Cryptopia but they gave us this boiler plate response.
“We cannot speculate on the security of other crypto exchanges, but can say that security is a top priority for Cryptopia.
Cryptopia is invested in adhering to the highest standards in coin listings to ensure our customers have access to an optimal trading platform.
The value of Coins can be affected by many other factors including (but not limited to) future sales or further issues (e.g. airdrops), negative publicity involving the Coin issuer or project, failure to deliver projects or failure of projects to meet expectations, failure of or material damage to the underlying network (including through cyber-attack), fraud or theft by or affecting the Coin issuer or project, competition in the issuer’s market, technical failures or setbacks, or general global and economic conditions and sentiments. You must research Coins that you are interested in carefully. Their whitepapers or other offer materials may list further risks, which are relevant to holding them.
For example, Coins can be subject to 51% attacks. This refers to an attack on a blockchain by a group of miners controlling more than 50% of the network’s mining hash rate, or computing power, or otherwise controlling the blockchain’s consensus mechanism in an illegitimate manner. If this happens, the attackers may be able to control new transactions, halt payments or transfer and reverse completed transactions.
Cryptopia does not control the blockchain or network for Coins and cannot stop this. If we become aware of an attack, we will assess the best response on a case-by-case basis, which may include suspending or removing Coins from our exchange.
For additional information around these technical nuances, please review Cryptopia’s risk statement: https://www.cryptopia.co.nz/Home/RiskStatement”
The quote was credited to Raj Wadhera, the Chief Marketing Officer and Sales Director of Cryptopia. We reached out to Cryptopia for further clarification but they then referred us to a media relations firm who pointed us to the same quote.
There have been other reported issues on Cryptopia as well, including a user who claims he was asked to pay $1700 to return his coins, because he forgot to include a paymentID with his deposit. While the issue originated due to user error, a $1700 fee for what should be a simple fix seems excessive.
Cryptopia is hardly the only exchange with reported issues, and with the bears being out in the market again, we may see how many of them can handle a run on poor performing coins.
While Cryptopia’s issues may be due to a bug in a coin’s wallet, better practices could have been followed. A new account shouldn’t be able to deposit and withdraw so many coins so quickly that it affects multiple markets, if that is indeed what happened.
We will update this space if and when Cryptopia gets back to us.