September 24, 2023

GNY Prepares to Sue Grant Thornton for Breach of Duties at Cryptopia

On 21 July, the legal representation of GNY, a company focused on artificial intelligence and the issuer of LML, filed a final notice of breach of duty by the exchange’s liquidators. The liquidator in question is the accounting firm, Grant Thornton, which GNY accuses of botching the handling of the hacked and now defunct Cryptopia cryptomoney exchange.

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Such a notice is the final step before a lawsuit, which would add to an already complicated case seeking to return the funds from the affected exchange.

The attack and the distributed drain on the funds

Hackers accessed Cryptopia, a New Zealand-based crypto currency exchange, for two weeks in January 2019, obtaining an estimated NZD 23 million (USD 16 million).

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GNY declared NZD 27,228,202.35 (about USD 18 million) in its complaint with creditors last year. According to analysts, the company lost some 492 Bitcoins (BTC): USD 2.5 million at the time of the complaint, which would now be approximately USD 4.5 million at the time of this publication.

Grant Thornton, on the other hand, has stated in the past that the deadlines shown in the case were not reasonable.

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Citing recent misconduct by Grant Thornton, a GNY representative told Cointelegraph that the latter was concerned that the former was ignoring creditors in the interest of filling his own pockets.

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Speaking to Cointelegraph, Cosmas Wong, founder and CEO of GNY, described the chase more as something about trying to get a seat at a table, saying that Grant Thornton had ignored the company’s claims throughout the liquidation process:

„The biggest problem is that they (Grant Thornton) had our complaint from the beginning. Our complaint was before the liquidation of the company.

„We don’t expect to get our money back. That’s not what happens in a liquidation, but we expect them to admit our claim,“ Wong explained. „Right now, it looks like they’re trying to pretend we’re not there.

This is in line with Wong’s earlier statements on behalf of GNY. In announcing a lawsuit against Cryptopia prior to its liquidation last year, Wong wrote, „Our motives for filing a complaint against Cryptopia go beyond money. In the same vein, he told Cointelegraph that „we are not looking for anyone’s tokens“.

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In a statement to Cointelegraph, representatives of Grant Thornton New Zealand wrote: „We understand that this is a difficult time for creditors. However, the accusations made by this creditor are without merit and we deny them completely“. They further warned „that it is defamatory to make false claims in the public domain“.

The Bitcoin Circuit hack was the first in a long series of hacks that some exchanges experienced in 2019. The law behind how to distribute the assets of a failed crypto currency exchange remains unsettled.