Bitgrail Bitcoin Assets Taken by Italian Government, Victims Still Fuming

Bitgrail Bitcoin Assets Taken by Italian Government, Victims Still Fuming

Embattled cryptocurrency exchange, Bitgrail, announced ongoing bankruptcy proceedings in Italy have turned full force, as the court seized the exchange’s bitcoin wallets. The ecosystem seems decidedly torn between addressing the fundamental cause, a hack that drained $170 million, and making victims whole.  

Also read: William Shatner Joins Bitcoin Mining Project, Admits He Doesn’t Quite Get It

Italian Court Seizes Bitgrail’s Bitcoin 

“On June 5, 2018, pursuant to the Tribunal of Florence orders,” Bitgrail posted Friday, a full eleven days after, “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.”

Bitgrail Bitcoin Assets Taken by Italian Government, Victims Still Fuming

Reaction was pretty fierce, if Twitter threads can be believed. @LucChase thundered, “Very bad news to see the court seized the remaining assets. Which idiot thought bringing the courts in could ever be a good move? We need Bitgrail to trade it’s way out of this mess. Now it is a guaranteed loss.” @Bitgrailed struck another note, claiming asset seizure was “Better than in your hands Firano.” @asael2 echoed a popular sentiment, asking, “Somebody know where this criminals live? Local authorities should be notified!” @LookItsLewis put a finer point on the affair, “Wow … and so everyone who predicted all of your funds would disappear and you’d shut down were correct. You should have let everyone withdraw their currency while there was still time. This is now (as if it wasn’t already) officially your fault.”

Indeed, the Italian court seized assets in what appears to be a foregone conclusion: bankruptcy, determination of findings, and eventual redistribution of what’s left to outstanding creditors and victims.

Nano Soldiers On

Bitgrail has had a tough go of early 2018, and was more or less shuttered as far back as February. At first it seemed to be the result of a Mt. Gox-like hack, totalling 17 million nano (XRB) worth something on the order of $170 million. Francisco Firano, founder of the exchange, announced its insolvency, attributing losses to the development team and their failure to secure the token. For its part, developers put the blame squarely on Bitgrail, arguing “all reliable evidence we have reviewed continues to point to a bug in Bitgrail’s exchange software as the reason for the loss of funds.”

Bitgrail Bitcoin Assets Taken by Italian Government, Victims Still Fuming

The Nano Foundation, an advocacy group charging to recover funds, made the above statement in April. By May, Mr. Firano seemed to be attempting a relaunch of the platform, and some say it was in an effort to make victims whole by offering a new token scheme to fill in gaps of losses. The same day Bitgrail announced its return, it announced it would be unable to launch due to a court injunction.

While the exchange seems to be all but dead, the Nano project soldiers on, releasing three node updates, patches, in as many months.  

What do you think about going to courts for relief in such cases? Let us know in the comments. 


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Italian Court Rules Bankrupt Crypto Exchange BitGrail Must Stay Closed

Italian cryptocurrency exchange BitGrail won’t be reopening anytime soon, despite its wishes to the contrary. Last Thursday, on May 17, the Court of Florence fully upheld a preliminary order barring the exchange — which is currently undergoing bankruptcy proceedings — from resuming operations and once again offering trading services to customers. The precautionary measure was

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‘Hacked’ Crypto Exchange BitGrail Shuts Down 3 Hours After Re-launch

Italian cryptocurrency exchange BitGrail has once again suspended operations after briefly re-opening most of its trading markets on Tuesday. The exchange, which has been immersed in controversy since 17 million Nano tokens (XRB) — now worth approximately $140 million — went missing in February, re-opened trading for all coins except XRB at 10:00 UTC. By

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Bitgrail’s $170M Hack Continues to Provide Drama

After $170 Million Bitgrail Exchange Hack, Lawsuits and Lawyers Get Involved

Fallout from the $170 million hack earlier this year of the Bitgrail exchange continues to mount, and this time lawyers are involved. A class action lawsuit was announced against Bitgrail’s Nano core development team, seeking damages and a “rescue fork” to recover funds. In response, a group calling itself Nano Foundation fired back, insisting blame for the hack rests not with developers but with Bitgrail itself, and they’re raising funds on behalf of victims to bring their own suit.

Also read: First Soros, Now Rockefellers Move into Cryptocurrency

Bitgrail Hack Fallout Means Lawsuits

Perhaps emblematic of where the cryptocurrency ecosystem is at present, the Bitgrail exchange hack from earlier this year continues to provide drama. Back during 2017’s massive price run up, at the start of December (Nano was then known as Railblocks, under the ticker, XRB) “1 XRB could be bought for $0.20. One month later, 1 XRB had soared to $35 after gaining 17,500%, making it 2017’s biggest gainer and putting the likes of bitcoin, litecoin and ripple in the shade,” News.Bitcoin.com reported.

Rather suddenly the Italian micro exchange was swimming in hundreds of millions in value. In late January of this year, Bitgrail abruptly suspended trading. Within weeks, the exchange announced an indefinite stoppage due to a 17 million XRB/Nano “shortfall” from a wallet it managed. It assured users authorities were alerted.

After $170 Million Bitgrail Exchange Hack, Lawsuits and Lawyers Get Involved

Rumors flew: The exchange’s charismatic owner had made off with the loot. Indeed, Nano core devs even alluded to at the very least mismanagement. Bitgrail publically implored its devs to change key aspects of the code in order to return coins to users. Back and forth the two sides have gone, but one thing is clear: 12.7% of XRB remains missing.

By March, Bitgrail announced a 20% return of customer Nano with the other 80% being made up in a new coin, BGS, on one condition: users, upon reanimating their accounts, would be required to sign away future legal claims against the exchange. It is unclear how many customers were eager to take up the offer.

Class Action, Legal Fund

This week, Bitgrail customer Alex Brola’s class action lawsuit against four Nano core developers based in Texas was published online. Mr. Brola’s initial $50,000 investment grew close to 17,000 Nano, according to court documents. His suit begins by attacking the entire project, defining Nano as a security thus placing those associated with its sale as violating US securities law. It then goes on to allege developers misled Bitgrail users in nearly every regard, from the supposed integrity of the system itself against hacks, to Nano devs actively conspiring to ultimately achieve ill gotten gains.

Mr. Brola and the respective class of victims are seeking return of their coins and fiat investments, along with a mandated “rescue fork,” presumably to recover said coins, and restitution in the form of all damages incurred by Mr. Brola and the class as a result. They’d also like an audit, a full accounting, and a trust set up for coin distribution, along with attorney’s fees paid in full.

After $170 Million Bitgrail Exchange Hack, Lawsuits and Lawyers Get Involved

In response, a group referring to itself as the Nano Foundation claimed it was they who really represented hack victims, and that a legal fund was being established to bring action against Bitgrail exchange. They detail having formed an alliance with “Espen Enger, a representative of nearly 600 Bitgrail victims at the time — now over 1,400, announcing our plans to help establish a legal fund. We had a series of productive initial discussions with Mr. Enger. Over time we became confident that Mr. Enger was the best prepared person to manage a legal fund and a large group of Bitgrail victims in their pursuit of justice in Italy.”

Their stated goal is to help smaller investors. They claim to have doubled the victims’ legal fund from $300,000 to $600,000 as of 9 April 2018, while “will be matching the contributions of the victims to the legal fund established by Mr. Enger — including both past and future donations, for up to $1 million — with a goal of establishing a total legal fund valued at $2 million.” They’ve set up a Discord account as a way to keep tabs on their progress going forward.

 Which side do you believe? Let us know in the comments section below.


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Bitgrail to Refund Hack Victims with Newly Created BGS Tokens

Bitgrail to Refund Hack Victims with Newly Created BGS Tokens

Bitgrail has denied responsibility for the recent hack that saw the theft of 17 million XRB, or Nano, in comments made in a Telegram group for victims of the hack. Despite rejecting responsibility for the incident, the exchange states that it will “voluntarily” refund users through the creation and issuance of BGS tokens.

Also Read:Three South Korean Crypto Exchanges Raided for Diverting Funds 

Bitgrail Operator Denies Responsibility for Hack

Bitgrail to Refund Hack Victims with Newly Created BGS TokensA document prepared by the operator of Bitgrail, Francesco “The Bomber” Firano, has been the subject of widespread reporting, following its dissemination to members of a Telegram group comprised of victims of Bitgrail’s hack.

A translated summary of the document has been made available by the Telegram group, as Mr. Firano apparently “did not want […] the whole doc[ument]” shared. The release of the translated document was approved by Mr. Firano.

The summary states that Bitgrail “plans [to] reopen soon,” adding that the date on which it will re-launch “will be announced soon.” The document also asserts that Bitgrail “still sees themselves as not responsible for the theft and therefore they believe they have no obligation to refund stolen coins”.

Bitgrail to Refund Users with BGS Tokens

Bitgrail to Refund Hack Victims with Newly Created BGS TokensBitgrail states that “on reopen […] all non-nano funds will be available and withdrawable, nano balance will be set to 20% of what it was before.” In order to repay the remaining 80% of nano balances, Bitgrail states that it will “voluntarily” introduce a new token called BGS (Bitgrail Shares), which will be distributed to victims of the hack. Bitgrail claims that it will then purchase back the BGS tokens at a rate of “$10.50 USD” per token, with purchases set to take place at the end of each month. The summary states that Bitgrail will use half of its monthly profits to conduct the purchases.

Participation in the company’s “voluntar[y]” refund comes with a stipulation, however, as customers of the “platform after reopen will [be] requir[ed] to sign a “waiver of all rights for legal action.”

Exit Scam Speculation Continues

Bitgrail to Refund Hack Victims with Newly Created BGS TokensBitgrail has been subject to accusations that the hack it experienced may have comprised an inside job. The tiny Italian cryptocurrency exchange apparently existed for the primary purpose of facilitating the trading of Nano, formerly Railbocks, which languished in relative obscurity before making gains of 17,500% at the end of 2017.

Critics of Bitgrail have pointed to persistent difficulties reported by users of the small exchange in attempting to withdraw funds during the period leading up to the hack, with many suggesting that Bitgrail’s hack may have been a cover for an exit scam.

The Nano team have sought to distance themselves from Bitgrail and Mr. Firano, last month stating “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.”

What is your response to Bitgrail’s proposed creation and issuance of BGS tokens? Share your thoughts in the comments section below!


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20% Gains: Nano Floats in a Sea of Crypto Red

The post 20% Gains: Nano Floats in a Sea of Crypto Red appeared first on CCN

Nano is the only coin in the top 30 by market cap to have gained significantly on a day when most cryptocurrencies have fallen by high single-digits. At the time of writing, Nano (XRB) is up almost 20 percent to the US dollar and almost 25 percent against Bitcoin. At the time of writing, Nano … Continued

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Questions Mount Over $170 Million BitGrail ‘Hack’

The post Questions Mount Over $170 Million BitGrail ‘Hack’ appeared first on CCN

Questions continue to mount over $170 million worth of Nano (XRB) tokens that have gone missing from little-known cryptocurrency exchange BitGrail. As reported by CCN sister site Hacked, there is growing suspicion among Nano (formerly Raiblocks) community members that BitGrail, which is based out of Florence, Italy, was insolvent long before the alleged hack and … Continued

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Bad Code Has Lost $500 Million of Cryptocurrency in Under a Year

Bad Code Has Lost $500 Million of Cryptocurrency in Under a Year

Cryptocurrency can be lost in a variety of ways, from hacking to forgotten passwords and failed flash drives. But in dollar terms, one of the biggest causes of crypto losses is bad code, and it’s not usually the fault of the coin’s developers. Instead, third parties, including shoddy smart contract developers and shady exchanges, are to blame for losses that have reached half a billion dollars in the last seven months.

Also read: Cryptocurrency Exchange Bitgrail Suspends Operations After ‘Losing’ $170 Million of Nano

Bitgrail Gets Railed for Dodgy Code

Last week, news.Bitcoin.com reported on the demise of Bitgrail, which contrived to lose $170 million of nano cryptocurrency. While the precise sequence of events that caused the catastrophic collapse of the exchange with the assets of thousands of customers is still being confirmed, poor code is being blamed. As reported at the time:

There are rumors that Bitgrail became insolvent following a withdrawal bug that was discovered by some users and then shared in Discord and other chat groups, causing the wallet balance to gradually diminish. One user explained: “There was a bug on Bitgrail where if you placed two orders you got double balance added to your account. You could then withdraw while the orders were up and steal the coins. You had negative balance in the end but you could just make a new account.”

Bad Code Has Lost $500 Million of Cryptocurrency in Under a Year

In the aftermath of the incident, this theory has been bolstered by allegations that a bug was indeed responsible, and not in nano’s code, but in Bitgrail’s. One source asserted: “There was a bug, on the withdraw page. But this check was only on java-script client side, you find the js which is sending the request, then you inspect element – console, and run the java-script manually, to send a request for withdrawal of a higher amount than in your balance. Bitgrail delivered this withdrawal. How many people did this? Who knows.”

There was another bug, you could request a withdrawal to your address – from another user-id, from another user-account. That would cause the other users balance to have “missing funds” or “negative balance”. Bitgrail bomber solved this bug by manually entering the “correct” numbers in his database. This is what you get for using a PHP website coded by same skill-level as CfB of IDIOTA.

Even the Best Cryptocurrencies Aren’t Immune to Poor Code

The cryptocurrency most commonly associated with catastrophic bugs is ethereum. That’s not due to its underlying code, but on account of the smart contracts that can be built on top of the ethereum framework. First there was the DAO, which led to ethereum being forked right out the gate, and then there was the Parity bug that caused 150,000 ETH to be stolen, followed by the other Parity bug that caused $168 million of ETH to be locked up.

In the past couple of weeks, ethereum bugs have surfaced once more, albeit on a smaller scale. Proof of Weak Hands (PoWH) was a joke scamcoin which turned into an actual scamcoin after a bug led to the loss of 900 ether worth $1 million that had been sent to the contract address. The developer then disappeared after receiving death threats from investors aggrieved to discover that the joke Ponzi they were buying into was even less legitimate than it had seemed.

Bad Code Has Lost $500 Million of Cryptocurrency in Under a Year
After a smart contract bug led to the loss of 900 ETH, the PoWH website looked like this in the days afterwards

PoWH has since spawned a new scamcoin called ethpyramid which is for “strong hands only”. To the question “Is Ethpyramid secure?” the site responds “Yes. Our dev team put a lot of time into refining and testing this contract to make sure your tokens are safe. Internal functions of the contract are not accessible to the end user.” There’s also PoWH420, “the world’s dank autonomous and self-sustaining 420 pyramid scheme”.

Bad Code Has Lost $500 Million of Cryptocurrency in Under a Year
PoWH 420

Even if joke coins and their joke developers are taken out of the equation, it’s evident that cryptocurrencies are only as strong as their weakest link. While altcoins such as ethereum and nano have undoubted potential, like every other crypto they’re hostage to bugs lurking in wallets, smart contracts, and exchanges. One bad line of code is all it takes.

Do you think Bitgrail was brought down by a withdrawal bug or is there more to this story? Let us know in the comments section below.


Images courtesy of Shutterstock, and PoWH420. Katie Webster assisted with this article. 


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NANO (XRB) Plummets after $170 Million Stolen on BitGrail

NANO (XRB)

It was announced yesterday that BitGrail, the Italian cryptocurrency exchange, lost 17 million of the cryptocurrency NANO (XRB). To date, the hack is worth over $170 million USD.

A week ago, RaiBlocks rebranded to Nano and jumped in price nearly 40% in 24 just hours.The rebranding was highly anticipated by most in the project’s community but not all were certain it would be the best move. Non-the-less, it seemed to have been a positive move until now.

Nano provides fast, easy and free transactions on its blockchain. These transactions can be done on an ...

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$170 Million: Cryptocurrency Exchange BitGrail Looses 17 million Nano (XRB)

The post $170 Million: Cryptocurrency Exchange BitGrail Looses 17 million Nano (XRB) appeared first on CCN

BitGrail was the fifth most popular exchange for XRB trading according to Coinmarketcap, however the volume has now been amended to zero. With a market valuation today of $10 per XRB, the to, al loss is estimated to be $170m. The Nano Core team were informed by the owner of BitGrail, Francesco “The Bomber” Firano … Continued

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DigixDAO (DGD), Dentacoin (DCN), and Nano (XRB) Take Off

The crypto winners for the day are Dentacoin (DCN), DigixDAO (DGD), and Nano (XRB).

These altcoins have experienced the largest percentage gains of the day so far. After the India crisis of yesterday, it’s nice to see some coins back in the green.

DigixDAO

DigixDAO has experienced the biggest gains of the day so far, increasing by 25.43%% in the past 24 hours and is the 34th largest cryptocurrency by market cap. DGD is currently trading for $333.83.

The platform tokenizes gold on Ethereum by leveraging distributed ledger technology.

DigixDAO ...

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RaiBlocks Rebrands to Nano and the Coin sees a 37% Increase! – UPDATED

RaiBlocks Rebrands to Nano

See Update

In the latest crypto news, RaiBlocks rebrands to Nano.

The instant transactions, zero fees, infinitely scalable altcoin RaiBlocks (XRB) announced today that it would be rebranding itself. Nano will be its new identity. That means no more uncertainty over the pronunciation of the name – Ray? Rye? – because now the name is sleek and simple. The question now becomes, what does a rebrand mean for Nano?

So far, it’s purely good news. Currently, XRB is selling for $19.81. The coin has gone up 37.77% in the last 24 hours, ...

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