Last February, BitGrail reported huge losses due to an attack. The impact was enough to make the exchange insolvent. However, users are outraged by this especially with the way the situation was being handled. A common response to deadly attacks would be to fork the cryptocurrency; this was not the case with Nano. It then stated:
“We now have sufficient reason to believe that Firano has been misleading the Nano Core Team and the community regarding the solvency of the BitGrail exchange for a significant period of time.”
$187 million worth of Nano (previously RaiBlocks) were lost during the incident. Trading then was halted, and it became impossible for the company to refund the stolen amount, according to CEO Francesco Firano.
At this point, prices of Nano experienced a steady decline. This much is understandable since lost funds were not responsibly refunded as BitGrail decided to just stick with the hacking claim. This way, BitGrail could “meet its users half-way”.
With this, BitGrail is facing an even bigger problem – Italian authorities are seizing the firm’s Bitcoin funds. The official announcement was released last June 15, but did not mention the worth of the funds.
“On June 5, 2018, pursuant to the Tribunal of Florence orders, the bitcoins contained in the company’s wallets were seized and brought under control of the judicial authorities pending further Court decisions in the pre-bankruptcy proceeding.”
Victims of the reported BitGrail hack petitioned to the court to get back what is rightfully theirs. BitGrail asserted that the company was bankrupt and was no longer capable of making full refunds if any at all. After the petition was backed by more than 3,000 people, the move to seize assets by the government began.
Responsibility for the lost funds could not be any heavier. This caused BitGrail and Nano Foundation to argue over who had more responsibility for having allowed the hack – slack in BitGrail’s security or vulnerability in Nano’s blockchain.
The Nano Foundation, as part of its efforts to allow victims to recover funds, intended to launch a new token where users could possibly recover some of its losses. However, this did not prove to be worth anything when BitGrail attempted to resurface. The court injunction simply kicked in, and BitGrail was prevented from doing business of any kind.