The cryptocurrency frenzy consumed the world over the last 2 or 3 years to an unimaginable degree. 2017 is a prime example. Billions upon billions started flowing into the industry as it became increasingly popular. And now that the crypto bear market seems to be counting its last days, this is more of an issue for the rest of the financial world than ever before. Now that the Spring is upon us and even more people are going to start deciding where to invest their money. Thanks to the relatively quick increase on cryptocurrency prices, CFD brokerages, as well as other traditional markets are starting to campaign their products. Features like the XM welcome bonus conditions are becoming more and more apparent. But as it has happened before, all of this newfound attention brings in opportunistic people, ready to leap at the chance of making a quick buck.
Althogh traditional asset brokers are trying to capitalize on the crypto bull market the majority of the market capitalization lies with cryptocurrency exchanges. But with great money comes great responsibility and a number of exchanges have proven to be unable to handle that burden. Exchange hackings have been rampant throughout the industry for years and even though the security measures implemented by the leading companies on the market are constantly improving, with so much money at stake, hackers appear to be unwilling to back down from the challenge regardless the risks.
The hacking of Cryptopia
One of the more recent examples of hacker attacks was the malicious hacking of Cryptopia just a few months ago in January, which saw 190 million USD worth of tokens disappear from the New Zealand-based exchange leading it to shut down.
The exchange website later reopened with a read-only interface, as the company’s officials issued assurances that the losses would be reimbursed to the thousands of investors that were holding tokens on the exchange. The company promised to pay back the customers who lost their crypto portfolios to the hacking, however, it failed to provide what specific steps it would be taking to make sure that their promises don’t remain just that – promises.
Not long ago, on March 17, the bankrupt exchange issued another statement trying to convince its users that it was doing everything it could to return them their money. Cryptopia said that they would provide additional details regarding the issue by the end of the month. However, April has already started and the company still hasn’t said anything, which is not looking good for all the people that were wronged in this unfortunate event. Many are starting to doubt whether the compensation is going to happen at all.
Crypto market seemingly enters bull run amidst the controversy
One can only imagine how Cryptopia’s hacking victims must feel being deprived of their entire cryptocurrency holdings, now that the market appears to have broken through the resistance and started to rally.
The cryptocurrency bear market might be nearing its end, or it may have already ended. Bitcoin has gained over 20% by now and other cryptos are rising along with it. We might be entering a new bull market, and that’s especially damning for the thousands of users of Cryptopia who lost their holdings.
At the time when the hack occurred, a single Bitcoin was worth less than 3600 USD, now it has passed the 5000 dollar mark and is showing no signs of stopping. Once the 4200 USD resistance point was breached, this seemed like the most expected development of events. Of course, a correction is to be expected, but if we’ve truly entered the bull market, it will do little to slow down the Bitcoin train. With that in mind, it’s depressing to imagine what all those people must be experiencing when they see the kind of profits they’re missing out on.
Will Cryptopia actually reimburse its customers?
This hack may not be the biggest in history. That title belongs to a Japanese exchange that lost over 530 million USD worth of tokens a year before the Cryptopia hack took place. Still, every time such hacks happen, it’s a big deal, the biggest deal in the world for the regular investors that get caught in the middle.
All of this is made worse by the fact that the cryptocurrency exchange is on record saying that the amount each of the victims of the hacking will receive will be calculated using the prices of the tokens as they were back on January 14, when the hacking took place. If we were still experiencing the kind of prices we had then and the bear market was still going strong, waiting for compensation may have been easier for a lot of those people. However, right now, tensions run high. Regardless of which cryptocurrencies they used to own, the entire market appears to be in an uptrend, and it must be extremely hard to come to terms with the fact that you’ll miss out on some amazing gains because of something that you had no part or say in.