Sharma v Cryptopia Limited - [2025] NZHC 2888

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2025-485-695

[2025] NZHC 2888

BETWEEN
VIHANG SHARMA

Plaintiff

AND

CRYPTOPIA LIMITED

First Defendant

AND

DAVID IAN RUSCOE MALCOLM RUSSELL MOORE

Second Defendants

Teleconference: 1 October 2025

Counsel:

G D R Shand for Plaintiff

S A Barker for First and Second Defendants

Judgment:

1 October 2025

Reissued:

2 October 2025

JUDGMENT OF ISAC J

[Application for freezing order]

Introduction

[1] This proceeding is another arising from the well-known liquidation of Cryptopia Ltd.

[2] Cryptopia ran a cryptocurrency exchange that was hacked in January 2019. Some $30 million worth of cryptocurrency was irretrievably transferred to an undisclosed external exchange. In May 2019, Cryptopia’s shareholders appointed David Ruscoe and Malcolm Moore as liquidators of the company under s 241(2)(a) of the Companies Act 1993. The liquidation involves complex arrangements regarding approximately 370 functioning cryptocurrencies owned by 960,000 account holders

SHARMA v CRYPTOPIA LTD [2025] NZHC 2888 [1 October 2025]

with positive balances in around 180 countries. On 8 April 2020, this Court determined that each type of cryptocurrency is intangible personal property held by Cryptopia as a trustee for the benefit of all of the account holders of that currency.1 Cryptopia is a beneficiary of some of those trusts for cryptocurrency it held itself.2

[3] In a later proceeding, the liquidators applied for directions from the Court regarding a distribution process that returns cryptocurrency held on trust by Cryptopia to account holders as beneficiaries. On 1 March 2024, Palmer J made several directions as to the distribution of cryptocurrency to account holders and the application of trust administration costs to each of the cryptocurrency trusts.3

[4] There was a final cut-off date for claims by account holders of 30 September 2025, after which the liquidators may proceed on the basis that the only beneficiaries of each cryptocurrency trust are those account holders who have fully completed a claims portal process. After that stage, the liquidators will require further directions as to the treatment of unclaimed assets and various other issues necessary to wind up the liquidation of Cryptopia.4

[5] Against that background, the applicant, Dr Vihang Sharma, applies for a without notice freezing order preventing the liquidators from distributing or otherwise dealing with cryptocurrency equivalent to that claimed. Dr Sharma says that efforts to establish his ownership have been unsuccessful. The liquidators are not inclined to provide him with an undertaking preserving his claimed interest in Cryptopia’s assets, and with the passing of the cut-off date for account verification there is a risk of dissipation.

[6] In support Dr Sharma and his accountant have made affidavits claiming the existence of a pre-hack investment in Cryptopia of 549 Bitcoin covering up to 471 separate accounts. The approximate value of these investments today amounts to NZD $108 million. Dr Sharma deposes to having been frustrated by the liquidators’

1 Ruscoe v Cryptopia (In Liquidation) [2020] NZHC 728, 2020 2 NLZR 809 at [69], [120], [133], [187],…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Sharma v Cryptopia Limited

Details

AGLC: Sharma v Cryptopia Limited [2025] NZHC 2888
Case: [2025] NZHC 2888
Decision Date: 1 October 2025

CaseChat Overview and Summary

In Sharma v Cryptopia Limited, Dr Vihang Sharma sought a without notice freezing order to prevent the liquidators from distributing cryptocurrency assets held by Cryptopia Limited. The application arose from the liquidation of Cryptopia, a cryptocurrency exchange that was hacked in 2019, leading to the loss of $30 million worth of cryptocurrency. Dr Sharma claimed ownership of cryptocurrency worth over $108 million but had failed to establish his ownership within the deadline set by the liquidators. The primary legal issues were whether Dr Sharma had a good arguable case, whether there were assets to freeze, and if there was a real risk of dissipation.

The Court found that Dr Sharma's application was not founded on proper grounds, as he had delayed in taking steps to protect his position until shortly before the deadline. The evidence supporting Dr Sharma's claim was deemed tenuous, lacking sufficient detail to establish a good arguable case. Additionally, Dr Sharma's conduct in another proceeding, where he had attempted to obtain Court documents improperly, raised concerns about his credibility. The Court also noted that Dr Sharma had not provided a substantial security to support the freezing order and there was no imminent risk of dissipation of the assets. Finally, the balance of convenience did not favour the grant of interim relief.

Consequently, the Court dismissed the application for a freezing order without notice. The application was adjourned for review on 6 October 2025, with the possibility of a further hearing if Dr Sharma chose to pursue the matter on notice. Costs were reserved.

Orders