Users of the hacked New Zealand-based cryptocurrency exchange Cryptopia may soon receive a ‘rebate’ on their lost funds, but details on it are scarce. Some suggest it’ll be in fiat currency according to the price of the cryptos users lost at the time of the hack, on January 14.
According to local news outlet Scoop, experts have estimated $23 million worth of investors’ cryptocurrencies were stolen by Cryptopia’s hackers. The hack, as CryptoGlobe covered, was an unusual one as over 17,000 wallets were drained of Ethereum and ERC-20 tokens.
The cryptocurrency exchange has been working with authorities in New Zealand to look into who’s behind the security breach. While investors haven’t been given a lot of information on the ongoing investigation, last month Cryptopia emailed them detailing a “rebate for customers who unfortunately lost funds” was coming.
In it, the firm’s co-founder Rob Dawson wrote:
We are working through the logistics of this to ensure it is equitable and in compliance with local laws.
More information on the rebate was set to come by the end of March, but so far investors haven’t heard anything back. It’s worth noting Cryptopia has been allowed to reopen back in February, and has as of last month enabled trading in 40 different currency pairs.
Cryptocurrency and tax specialist Campbell Pentney, cited by the local news outlet, noted the rebate will be welcomed by the market, but revealed one key concern will be whether investors can obtain tax refunds on the stolen tokens.
The challenge here is that this requires a degree of certainty that the funds are absolutely lost and the portion that is missing. One positive step is that traders can now reclaim their trading records which are vital for tax purposes.
The rebates, the local news outlet claims, will be paid out in NZ dollars, according to the exchnage rates most cryptocurrencies had at the time of the incident. Since then, however, most cryptocurrencies have seen their prices rise, putting investors at a loss.
Bitcoin, for example, has seen its price rise from under $4,000 to over $4,950 at press time, according to CryptoCompare data. Most of the tokens traded on the exchange rose more than BTC itself.
While it isn’t clear where the hackers sent most of the stolen funds, research from Elementus has found they cashed out over $2 million worth of crypto through decentralized exchange Etherdelta, out of a total $3.2 million cashed out as of February 9.