Xapo Institutional Custodian Accused of Storing Stolen Bitcoins
Main page News, Hacker Attack, Regulations

Institutional crypto custodian Xapo and Indonesia's largest cryptocurrency exchange Indodax have being sued for storing stolen 500 bitcoins without checking the source of deposited cryptocurrency, iHodl Russia has learned.

According to the court filling, the plaintiff, a German citizen Dennis Nowak, back in 2018 deposited 500 BTC to the balance of an unknown crypto exchange. Shortly after, a hacker withdrew the entire amount.

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Once Nowak discovered the loss, he contacted the Kroll research company to trace the stolen funds circulation. It turned out the funds were sent to Xapo and Indodax.

According to Kroll, the bad actors did not even try to cover their tracks or hide their activities. As a result, 19.99 BTC remained on Xapo and 479.69 BTC on Indodax. The court filling also says the AML and KYC procedures on Indodax and Xapo are "inadequate."

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According to the plaintiff, this makes both companies accomplices of the theft intentionally or unconsciously. Nowak wants to receive not only stolen funds, but also compensation for moral damage.

In August 2019, the US-based custodian Coinbase Custody announced the acquisition of Xapo’s institutional businesses.

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