To all XBY holders,
It was brought to our attention that on January 14th, 2019 Cryptopia had suffered a security breach. Police were called in to investigate. I have reached out to the exchange to understand how XTRABYTES™ investors were affected. They have been instructed not to communicate about this matter during the investigation.
To secure our investors coins, we made a decision to freeze the Cryptopia wallets for the time being. This took the majority of a day (January 15th, 2019) to complete.
A brief lesson on exchanges
When you enter an exchange, you are essentially leaving your coins in the exchange wallet at the door. You receive a copy that is used to trade within the exchange. This is all invisible to the user. When you leave the exchange, these copies are traded for the real coins/tokens removing them from the exchange wallet of each respective coin/token.
What does this mean?
Currently we can see who (addresses) brought coins into the exchange. We do not have visibility if they sold these coins within the exchange. This is visible on the exchange order books only.
Example: I bring in 1 Bitcoin to the exchange. I purchase 30,000 XBY. The exchange sees this on their order book but the XBY Block Explorer will have no record of this until I withdraw these purchased coins from the exchange.
At this point, anyone trying to transfer coins from the Cryptopia wallet (potential hacker), will not be able to. Once Cryptopia comes back online, we will unfreeze the wallet. This means everyone will have access to the coins that were in their Cryptopia wallets.
What happens if Cryptopia is down for an extended period of time?
Currently this situation is between Cryptopia and the police to resolve. We are simply protecting their wallets by freezing them. If they are unable to resolve this issue, we will request a third party to review their order book. This is to maintain the privacy of the exchange member. We will then be able to verify claims of holdings and transfer coins from the 2 wallets to the rightful owners.
What exchanges can I trade on now?
We applied (January 7/8) to additional exchanges and are currently in a review period. Once we are approved, we will update our home page to reflect the new exchanges as well as making an announcement.
What should I do?
To protect your investment please make sure to do the following:
- Transfer your coins to your computer wallet or paper wallet.
- Backup your wallet.
- Upgrade to the latest available wallet.
We will continue to monitor the situation and provide updates as we receive them.
CEO – XTRABYTES Ltd.
Wednesday, January 16 - https://www.police.govt.nz/news/release/update-investigation-involving-cryptocurrency-company
Tuesday, January 22 - http://www.police.govt.nz/news/release/police-making-progress-crypto-currency-investigation