Following Bitgrail Hack, Crypto-Exchange Commits to Cash Fund for Victims of Nano Theft. Not Everyone is Convinced the Offer is the Best Option
March 16, 2018 | Back to News
Bitgrail, an Italy-based cryptocurrency exchange, was attacked several weeks back and approximately $153 million in NANO was stolen. In the ensuing weeks, an acrimonious discussion took place between Bitgrail founder and CEO Francesco Firano, team NANO and users who were impacted by the theft. The attack was limited only to NANA (XBR) investors and Bitgrail users that traded other cryptocurrencies were reportedly not impacted by the hack.
This week, Bitgrail announced its intent to create a Fund to benefit users that lost digital currency in the attack.
Bitgrail insisted that a crime occurred and stated an investigation was in procces. The exchange said the vulnerability was due to NANO’s software and “therefore, for these reasons and in accordance with the law, it is not in any way responsible for the situation.”
“We confirm that an investigation led by the legal authorities is underway The purpose of the investigation is to shed light on the theft, therefore we have already provided all the useful elements in order to reconstruct the facts, including the evidence concerning those involved in the fraudulent activity, who took advantage of the vulnerability of NANO’s software, thus not Bitgrail’s. Those grounds are alone sufficient to relieve BitGrail S.r.l of any refund obligation and/or repayment of the stolen amounts.”
Bitgrail said that in demonstration of “good intentions” the exchange would meet users half-way without recognizing any liability. By establishing a cash fund, via a token, Bitgrail would help users recover stolen cryptocurrency over time.
Bitgrail has now created a new token (BGS or BitGrail Shares) and is ready to distribute 15.6 million tokens to impacted users on a 1 to 1 basis versus the stolen NANO. Bitgrail explained that the first of the month BitGrail will use 50% of the previous months trading fees in order to reacquire the BGS token, proportionally among the users at a fixed price of 10.5 $ per unit – in Bitcoin.
Users must accept a settlement agreement to participate in this offer apparently relinquishing any right of legal recourse with Bitgrail. For users that decide not to accept the Bitgrail deal, the exchange said it would have “no alternative except for the account termination in compliance with the TOSs.”
So what is the chatter on the offer? Well, it is mixed.
Some users appear willing to go along and take a chance on recouping some or all of their losses. Other investors seem to be determined to take legal action against Bitgrail. Some users have posted petitions on Petition.org. Some want NANO to fork to roll back the theft.
Probably the most pointed criticism of Bitgrail and explicit interest in pursuing legal action against the company, comes from Espen Enger from Norway. He has gathered over 1000 claims, from 56 different countries, that have experienced losses of more than $23 million. Enger has spoken to individuals who have lost $100 and up to $5 million, according to a recent post. Enger has also traveled to Italy and has met with dozens of attorneys. Enger reports that Firano is currently under criminal investigation.
Additionally, Enger says he has met with NANOs General Counsel regarding the Bitgrail theft. It sounds like NANO may wants to help out.
In the US, at least one law firm is investigating the Bitgrail hack. David Silver, of Silver Miller, told Crowdfund Insider;
“We are actively investigating the BitGrail hack. Our clients are confused how this hack, which has pitted the exchange against the development team happened.”
Silver Miller has launched class action suits against a multitude of ICOs that allegedly sold unregistered securities to US investors.