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Italian Law Enforcement Seizes all Bitcoin Holdings of Previously Hacked Exchange BitGrail

Reading Time: 2 minutes by on July 6, 2018 Bitcoin, Finance, News, Regulation
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The Italy-based exchange BitGrail has halted all trading activities and defaulted the site as being “under maintenance” after it’s core team confirmed Italian law enforcement had seized all bitcoin in the companies accounts. This comes months after approximately $170 million worth of the cryptocurrency NANO was hacked and stolen from the exchange.

The BitGrail Story Finally Coming to a Close

BitGrail’s troubles seem to be never-ending. Earlier this year in February 2018, the Italian based exchange announced that due to a discrepancy in its wallet-maintenance code, over $170M worth of NANO (the formerly known “RaiBlocks” cryptocurrency) was stolen from user’s accounts. A plethora of lawsuits, user uproars, and pending criminal investigations followed shortly after, all seemingly normal whenever hundreds of millions worth of a digital asset is stolen or “lost.”

BitGrail suspended trading shortly after the incident but soon re-opened, raising concerns that another hack was inevitable after only an ephemeral system analysis was performed. The community then became divided, while some skeptics even speculated that the hack never happened.

The BitGrail saga may be coming to a finale though, as, on June 15, 2018, Italian authorities confirmed they are seizing all Bitcoin holdings on the BitGrail’s platform pending criminal investigation. BitGrail has since suspended all trading activities, and all links on their homepage link directly back to the announcement confirming authority involvement.

What’s Next for BitGrail

In many cases within the crypto atmosphere, an influx of uncertainty and fear naturally coincides when a hack of such a significant amount of cryptocurrency occurs. BitGrail’s hopeful spirits after its hack this past February showed concern amongst its community. After only a short period, the team seemed eager to re-open its doors to all sorts of trading pairs.

In a small post distributed on their official news channel, BitGrail confirmed the fund seizures, and quickly updated the community alerting them that the site is undergoing “maintenance” with an unknown finish date pending “pre-bankruptcy proceedings.” While announcements regarding BitGrail bankruptcy filings are not official or confirmed as of yet, it seems as if its fate has been sealed.

Possible Reimbursement for Victims

The recent news of BitGrail’s fund seizures has upset many, mainly because when law enforcement gets involved in this sort of a case, it may take months, or even years to ever see funds that were lost. We’ve seen similar instances with projects that failed to deliver and were subsequently shut down by law enforcement or regulatory forces. While the community has stated its apparent discontent for the unfolding events, BitGrail’s founder Francesco Firano tweeted on June 15, stating “I cannot do anything.”

Others, are however hopeful due to recent events, stating that authority involvement is what is needed to finally retrieve the lost funds. Although these sorts of seizures may take longer amounts of time, it does bring the victims of the hack closer to eventually acquiring their funds than ever.

Before, it seemed entirely possible exclusively to those with access to prestigious law firms at their disposal, but now, the typical trader or investor has a better chance of seeing the once lost NANO, or fiat equivalency, back in their crypto wallets.

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