Bitcoin and Brew would like to apologize to our readers. The following story was written on 11/25, and was never published due to fear of unwanted social criticism. We are monitoring the situation and are actively working to inform communities affected.
Cryptopia Exchange ( https://www.cryptopia.co.nz/) has grown increasingly suspicious in their behavior. At the time of this article, there are approximately 100 coin wallets in maintenance mode. This represents about 20% of all the wallets on Cryptopia. Users are unable to withdraw, unable to create deposit address, and if coins are sent to prior used deposit address, they are not credited to the account.
The markets for coins in maintenance remain mixed; some markets are still open for trading, while others are closed for trading. Closing a wallet, but leaving the market open creates a unique situation for that specific closed market. Sometimes called a “closed loop pump,” manipulation of the market becomes relatively easier. Without additional deposits coming in (more potential sellers) the market can be pumped, and unsuspecting users buy into it. They go to withdraw, and can’t. Some users immediately dump then not wanting to hold a coin that can not withdraw. This can happen in a short period of time, and can be done even just when a wallet is going through a routine update.
However, the situation at Cryptopia has gone beyond reasonable doubt that there is some sort of issue hitting Cryptopia. With 20% of wallets in maintenance mode after a significant site update, and only a portion of those markets closed, the stench is increasing that something is afoot at Cryptopia. Crypto OG’s will remember the collapse of Cryptsy who went through this exact process. The last shoe dropping with Cryptsy was users unable to withdraw BTC without waiting potentially a week or longer. Cryptsy was shut down by authorities, and their assets seized. The site operator “Vern” ran off with millions of dollars in crypto (and this was 2015 guys) and left many people rekt.
Numerous cases were submitted in an effort to research this article. When submitting support tickets, Cryptopia replies with no information at this time, or tells a user to email their Coinwallets email address, for further support. Not one of the users had heard back from Cryptopia’s coinwallets address at the time of this article. As of Nov 6, Cryptopia appears to have stopped adding new coins to their exchange.
The purpose of this article is to inform you about the safety of using exchanges, and the importance of holding your own wallet keys. Cryptopia was asked for comment on this article but provided none. There is no clear evidence Cryptopia is insolvent, however, users with withdrawable balances are advised to move your coins immediately to a local wallet. If we receive comment or update from Cryptopia, this article will include said update.
If you are currently having trouble with Cryptopia or any other exchange, reach us at [email protected] to share your story.