Victims of the BitGrail hack in February has filed a petition asking an Italian court to declare the cryptocurrency exchange bankrupt.
BitGrail reportedly fell victim to a hack early this year, resulting in the loss of 14 million Nano coins worth $187 million at the time. The hack was reported on February 8, but BitGrail owner Francesco Firano told CoinTelegraph that the theft happened on January 19.
Last week, Italian law firm BonelliErede filed a bankruptcy petition on behalf of BitGrail creditor Espen Enger, who allegedly was in contact with more than 300 claimants. According to a Medium post, most of the alleged BitGrail victims were concerned that their assets will be depleted further, which was why they “prefer an immediate accounting of BitGrail’s assets in bankruptcy.”
Nano developers previously claimed Firano had asked for the altcoin’s ledger to be modified “so as to cover his losses” and allegedly “misleading” the community regarding the exchange solvency. In his defense, Firano claimed the fault did not lay with the exchange, but originated with Nano’s “totally unreliable” protocol leading to timestamp inconsistencies on the Nanode block explorer.
BitGrail vowed to refund the victims. In mid-March, the cryptocurrency exchange proposed to issue a newly-minted BitGrail Shares (BGS) token, which it said would cover 80% of the losses. The remaining 20% would be covered in XRB, according to BitGrail. However, victims would need to sign an agreement to forgo any legal action against the exchange.
This is the second lawsuit filed against BitGrail. In April, U.S. law firm Silver Miller filed a lawsuit on behalf of Alex Brola, an investor who sunk $50,000 into the Nano currency in 2017. In its lawsuit, Silver sought to have the altcoin conduct a hard fork that could “reset” its amount to where it was before the theft took place.
In response to the lawsuit, the Nano Foundation announced it would sponsor a legal fund to provide all BitGrail victims with legal representation.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
At least one law firm has found a niche market stemming from the rise in cryptocurrencies. The Silver Miller law firm is staying busy filing lawsuits against several entities involved in the cryptocurrency business, including Coinbase, BitConnect, Cryptsy and Kraken. It is also pursuing legal action against Initial Coin Offering (ICO) promoters Tezos, Giga Watt and Monkey Capital. Not having enough on its plate, apparently, the law firm is now going after cryptocurrency Nano.
A lawsuit has been filed by the firm on behalf of Alex Brola, an investor who sunk $50,000 into the digital currency in 2017. When the BitGrail exchange was hacked at the beginning of February, around $187 million worth of Nano (17 million coins) went missing, including Brola’s investment. Silver Miller is suing to have the altcoin conduct a hard fork that could “reset” the digital currency’s amount to where it was prior to the theft.
The fallout from the theft has attracted a lot of legal attention. There have been disputes over who was at fault, and it was reported that BitGrail’s owner and operator, Francesco Firano, tried to convince Nano developers to alter ledgers to help him cover his losses. The developers fought back, accusing Firano of misleading the Nano Core Team, as well as the entire community.
Silver Miller’s suit claims that there are hundreds or maybe thousands of investors that suffered because of the hack. To date, however, Brola is the only plaintiff listed on the suit. The firm asserts in the suit that it is a ““strong advocate for aggrieved investors harmed by the misrepresentations and illegal actions of cryptocurrency exchanges and issuers.”
The BitGrail hack came soon after the Coincheck hack of approximately $530 million in January. The Japanese exchange was at one point considered to be behind the theft. The publicity surrounding the hack brought wide-sweeping changes to cryptocurrency exchanges in Japan, and the company agreed to reimburse its clients at a rate of $0.81 per token, or a total of around $420 million. Coincheck never fully recovered from the scandal, and is scheduled to be acquired by online securities brokerage firm Monex Group on April 16.
Note: Tokens in the SegWit chain are referred to as SegWit-Coin BTC (inaccurately called Bitcoin Legacy or Core by many) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper. Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.