Your keys, his coins Cryptopia employee confesses to stealing $ 172K in crypto

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A former employee of the former cryptocurrency exchange Cryptopia has pleaded guilty to theft of approximately $ 172,000 in cryptocurrency that he obtained by making a copy of users’ private keys.

According to an article published on Monday by New Zealand media Stuff, the anonymous Cryptopia employee pleaded guilty in Christchurch District Court to theft over $ 1,000 and theft by a person in a special relationship referring in cases where a person takes funds held in trust from someone else. The court found the employee guilty and he will be sentenced on October 20.

The worker reportedly expressed concerns to Cryptopias management regarding the security of users’ private keys and made his own copy of the information on a USB drive. While the report does not say when it was able to copy private keys or access funds for the first time, Cryptopia held around $ 100 million in crypto at the time of its liquidation in May 2019.

David Ruscoe, a financial advisory services partner at Grant Thornton, the accounting firm assigned to liquidate Cryptopias, discovered the theft on September 3, when he noticed that 13 Bitcoin (BTC), worth around $ 165,000 at the time, had been withdrawn from several wallets on the crypto exchange. The unknown actor had also placed 2 BTC of the stolen funds in a crypto mixer.

Identifying himself with Grant Thornton in an email the following week after being warned by an associate, the former Cryptopia employee allegedly admitted to stealing the BTC as well as an additional $ 7,000 in crypto. He said he had already returned some of the 6 BTC coins and offered to send the rest with the assurance that he would not be criminally prosecuted. However, he later confessed his actions to the police and was subsequently charged.

The defendant admitted that he was frustrated with Cryptopia but also motivated by the belief that he could get away with the theft as he believed that no one would ever verify the old deposit wallets, according to the summary of the facts, according to Stuff .

Related: Roundup of Crypto Hacks, Exploits, and Heists in 2020

The New Zealand-based exchange suffered a major hack in 2019, which is believed to have resulted in the loss of around $ 16 to $ 18 million in crypto. Cryptopia subsequently suspended its services and went into liquidation. However, a court ruled in May 2020 that users of the exchange have the right to get their holdings back, and the claims process has already started.

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