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Former Cryptopia Member Sentenced to Home Detention After Admitting to $250,000 BTC Heist

Former Cryptopia employee sentenced to home detention.

The detention was a follow-up to his confession of $250,000 worth BTC heist.

Quick take:

  • Cryptopia went into liquidation following a $30 million hack on January 13, 2019.
  • Michael Glaser, who was the manager of the software interface of virtual wallets, is the culprit.
  • Glaser admitted to the stealing and ended up returning everything.

Cryptopia is a Christchurch-based crypto exchange. It went into liquidation following a hack on January 13, 2019. The hackers stole assets worth $30 million.

A former employee of Cryptopia named Michael Glaser was sentenced to nine months of home detention following a subsequent theft of $250,000 BTC.

Michael Glaser was the manager of the software interface where he had access to private keys of various crypto wallets.

Glaser confesses 

As Glaser's interim name suppression expired this afternoon, he says he vented concerns about the company's many wallets during his employment there.

Christchurch District Court heard on Friday that he was in a position of trust, having legitimate access to the wallet keys.

Glaser copied the private keys to a USB storage device between January 16, 2019, and May 14, 2019.

He then carried it back to his house to install it on his computer.

Having access to private keys enabled him to access tens of thousands of digital wallets and more than NZ$100m in cryptocurrencies. Nevertheless, Judge Gerard Lynch said there is no evidence he accessed those wallets.

A Grant Thornton liquidator received an email in September 2020 from a former Cryptopia client who said that they had mistakenly deposited Bitcoin into an old Cryptopia wallet and asked that their funds be returned.

Upon reviewing the wallets, it was found that some Bitcoin worth $235,000 had been unlawfully withdrawn in August 2020.

In the following week, Glaser sent a letter to the liquidator in which he confessed that he had stolen the Bitcoin along with $10,000 worth of Litecoin.

He returned the entire $246,000 balance, which the judge emphasized was important.

Glazer committed the crime on his own, the court heard, without any help or knowledge from anyone else.

Glaser wanted to keep his name secret

Glaser tried to keep his identity under wraps because of online death threats and hardships faced by his family.

In his testimony to Judge Lynch, Allister Davis warned that naming him would be like "throwing him to the wolves."

According to the lawyer, this was an "extraordinary case," and it would be difficult for some investors to distinguish Glaser's theft from the massive hack, regardless of the fact that the two were completely unrelated.

Davis said he was not involved, and police and Crown have not made any suggestion that he has been involved.

Davis said that the investigation of Glaser, a self-employed software developer with no prior convictions, has been carried out "with a fine-tooth comb" since then.

Glaser was sentenced to nine months of home detention in the final verdict. The special conditions include the right not to possess or consume alcohol and non-prescribed drugs.

He was additionally charged $21,225 as reparation to cover liquidators' costs

The information provided on DecentReviews does not constitute investment advice, financial advice, trading advice, or any other sort of advice. Do not treat any of the websites content as such. DecentReviews does not recommend that any cryptocurrency or blockchain asset should be bought, sold, or held by you. Conduct your own due diligence and consult your financial advisor before making any investment decisions.

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