Former Cryptopia employee pleads guilty to stealing more than $170,000 in cryptocurrency

A former employee of the New Zealand–based bitcoin exchange Cryptopia, which is in liquidation, has admitted to stealing more than $170,000 in cryptocurrency. This is reported by Stuff citing the transcript of the court proceedings.

The case was heard by Christchurch district court judge Allister Davis. The employee, whose name has not been disclosed, pleaded guilty to two counts.

He said that during his tenure at Cryptopia he created copies of private keys from users’ wallets and stored them on a USB drive. Using his personal computer, he moved the cryptocurrency worth NZ$245,000 (~$172,000).

The theft was not connected with the January 2019 hack. At that time, the exchange lost up to 10% of its funds — more than $17 million. Customer assets worth around $100 million were frozen.

In an effort to compensate customers, Cryptopia initiated liquidation. The liquidator was Grant Thornton, which in December 2020 began accepting claims for the return of funds from account holders.

Prior to that, Grant Thornton received a letter from one of its clients. He said that he had accidentally sent several bitcoins to an old deposit wallet at Cryptopia, and asked for the funds to be returned.

Experts checked a number of transactions and found that 13 BTC were withdrawn from such wallets, with 2 BTC of that amount routed through bitcoin mixers. The total value of the cryptocurrency at the time of the operations was around NZ$235,000 (~$165,000).

Later it emerged that other digital assets were withdrawn in the same manner worth NZ$10,000 (~$7,000).

Learning that Grant Thornton was examining the exchange’s old deposit wallets, the former Cryptopia employee contacted the audit firm and returned the stolen cryptocurrency.

He was released on bail pending a final ruling on 20 October.

In February 2021, hackers withdrew XSN tokens worth $45,000 from Cryptopia’s cold wallet, which had not been used since the breach.

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