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Judge Orders BitGrail Founder to Reimburse Victims of 2018 Hack

Reading Time: 2 minutes by on January 30, 2019 Business, Crime, Exchange, News
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On January 28, 2019, victims of the 2018 BitGrail hack announced that a court ruling has ordered the exchange to compensate them for the hack which led to the loss of over $195 million.

Breaking the Bank

On January 28, 2019, the BitGrail Victims Group (BGVG) made an announcement via Medium that a  decision has been made regarding the current trial regarding BitGrail, the Italian exchange that suffered a hack last year.

According to the announcement, the judge presiding over the case has ordered Francesco Firano, the owner of BitGrial, to return as much of the stolen funds as possible to customers of the exchange. The sentence was handed out by the Italian Bankruptcy Court, the victims group stated that:

“…the court concluded that both Bitgrail and Mr. Firano, personally, be declared bankrupt, authorizing seizures of many of Mr. Firano’s personal assets.”

Several of Mr. Firano’s assets such as his car have already been seized to the tune of a million dollars. As for BitGrail itself,

“…millions of dollars in cryptocurrency assets have been seized from Bitgrail’s exchange accounts and moved to accounts managed by trustees appointed by the Court.”

The Hack

In February 2018, Firano reported that about $195 million worth of Nano tokens had been stolen from the exchange. At the time, there were suspicions of the entire incident being an exit scam due to a number of odd decisions taken by the management of the exchange such as the halting of transactions involving Nano a month prior. Firano had also instructed the Nano developers to try and recover the missing funds by altering the ledger with a hard fork.

The case eventually reached the courts which determined that the error was on the part of the management.  

According to the judge, BitGrail itself had a software flaw that requested multiple withdrawals from the node. The flaw was, by the court’s account, “not the Nano network that allowed the multiple withdrawals.” Furthermore, the exchange also reportedly stored all of its Nano cryptocurrency holdings in a hot wallet which compromised its security.

The February 2018 hack was also not the first that the exchange experienced. In July 2017, 2.5 million Nano tokens were stolen and the management of BitGrail banned and blacklisted the accounts involved but only a few months later in October, another 7.5 million Nano tokens were stolen.

Just a few days before the hack was reported, Firano deposited 230 bitcoins into a personal account on a Cryptocurrency exchange, only weeks after converting the exchange’ a central wallet to a cold wallet.

Both BitGrail and the developers of the Nano tokens were sued by two United States Law firms. ggfff

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