OFFICIAL STATEMENT ON CRYPTOPIA
As a result of the security breach of Cryptopia Limited (“Cryptopia”) starting on January 14, 2019, thousands of digital wallets were compromised including the primary trading wallet for LML. Since that time, many of our LML holders have asked us what actions were being taken with respect to the security breach and the losses caused by the breach. We have avoided making any public statements as we were attempting to resolve the matter with Cryptopia. We made no progress with them, as Cryptopia was clearly not interested in engaging with us. On April 11, 2019, we filed a claim against Cryptopia in the High Court of New Zealand (you can find our statement of claim here). We were expecting a defense to be filed by Cryptopia on or about May 23, 2019. Yesterday, on May 15, 2019, Cryptopia filed for liquidation in New Zealand.
Our own losses arising from the security breach at Cryptopia were substantial. However, our motivations for filing a claim against Cryptopia transcended money. The lack of accountability by Cryptopia following the security breach is a threat to the ideals of the blockchain community. As members of that community, our claim was the best way for us to provide leadership on this issue, and make a stand against broken contracts, poor security, and a lack of accountability on behalf of our business and our tokenholders. We all rely on the dependability of these marketplaces and exchanges, and it is up to all of us to uphold the standards that we believe in.
We have every confidence that New Zealand’s insolvency laws will protect those of us that have been affected by this security breach and we will fully participate in Cryptopia’s liquidation process in New Zealand. We will also offer our expertise where needed.
All LML holders who have lost tokens on Cryptopia will be made whole, and we will release details of our plan to accomplish that in the coming week. Additionally, our website will be updated to ensure that other tokenholders who have lost tokens on Cryptopia are given as much information as possible to ensure that they can fully participate in the liquidation process.
Thanks to all of the community members that have been crucial in guiding our actions, and please reach out if you have any questions.