To all our valued customers,
As many of you know, we are standing at the edge of a new society one where currency is digital and massively global. It is CoinPayments mission to keep ahead of the changes and allow our clients to have the best advantages at every turn. With a new world and a new system there are many new opportunities and risks that are undertaken. We are writing you today regarding our continuing investigation into the theft of our users Ripple coins from the Coinpayments system. As most of you are aware, we discovered a technical issue with the Ripple hot wallets on June 5th, 2017. This security flaw was immediately rectified upon discovery, however the vulnerability allowed a handful of users to overdraw XRP from other user’s accounts.
The total exposure of this theft was over 21 million XRP coins spread across our user base. Through the diligent work of our core developers we have managed to track most of the stolen funds between a few major suspects. These identities will remain private as law enforcement agencies are still completing the investigation.
Firstly, we want to assure you that we take this matter very seriously and we value our user community and our reputation. Coinpayments is committed to returning all the funds that were stolen to every user affected by this crime.
We have identified every person who took advantage of this vulnerability and have reached out to them via our securities lawyers in the hope this was done in error and not in a malicious way.
Many users have come forward and returned the coins they mistakenly withdrew, however the reclamation of the majority of missing Ripple coins from the major suspects is taking much longer than anticipated as this investigation continues. With the cooperation of local and international authorities we are pursuing this with the full extent of the law.
To show our commitment to our users we are dedicating our entire corporate liquidity reserves to procure XRP coins directly from the Ripple Inc, OTC (over the counter) purchase desk. The core members of our team will also be using our personal funds to assist with the speed of this recovery.
Ripple Inc upper management was immediately contacted in an effort to restore user funds as quickly as possible by purchasing them directly off the market. A purchase of this size on the open market through exchanges would be inefficient and manipulative to the XRP price. Ripple Inc has graciously offered us locked in current rates for XRP coins in order to facilitate our purchase. This process requires very thorough Know Your Customer and Anti Money Laundering protocols which Coinpayments has been facilitating over this week and finally completed today.
We were hoping to begin reimbursing our users for their losses beginning today, Friday, June 16th, 2017, however due to the large amount of funds required and the complexity of this transaction it will take us through the weekend to complete the Ripple purchase. User accounts will reflect the distribution of the funds in XRP coins as soon as our wire is confirmed early next week. We will continue to update the community as the situation progresses.
The stress and pressure you are feeling is not unheard or taken lightly. We at the CoinPayments community carry the burden of stress in our partnership with you ten-fold. We understand many have used their savings and have mentioned lawsuits. Our desire is that in the months and years you have partnered with us, that we would work through this together and conquer the challenges ahead. We are here to protect the investments and recoup any losses that have occurred. We understand the urgency and frustrations of all of those involved and appreciate all your patience and support. We hope to build a stronger and tighter community through these challenging times.
Rest assured, the Coinpayments team are working day and night WITH you to restore what was lost. Please stay focused on the task at hand and let us recover the money together. We will continue to operate with the transparency and integrity that this community deserves.
We have taken initiative to create a Public Relations department in order to deal with correspondence to the situation at hand. Please forward all inquiries to pr@coinpayments.net, Thank you.
Sincerely,
Coinpayments Inc
Alex Alexandrov
CEO of Coinpayments Inc