BitGrail Exchange Operator Who Lost $170 Million in Crypto Ordered to Return Lost Funds to Investors

An Italian court has ordered the owner of the BitGrail cryptocurrency exchange, Francesco Firano, to declare bankruptcy and forfeit assets so they can be used to reimburse investors harmed when Firano “lost” 17 million Nano tokens (worth $170 million), a post by affected investors claims.

Italian Bankruptcy Court documents furnished by the victims state that Firano realized in February 2018 that the stolen tokens has been “double withdrawn (double spent)…by users who had exploited the vulnerability of the Nano software,” flaws initially denied by Nano developers.

The investors say that $1 million of Firano’s assets have already been seized, including his car.

They also claim that millions in cryptocurrency has also been seized from BitGrail exchange accounts and has been, “moved to accounts managed by trustees appointed by the Court.”

The Bankruptcy Court documents also state that, between January 12th and 28th, 2018, Firano blocked exchange users from withdrawing their cryptocurrencies from BitGrail after losing, “80% of the aggregate amount deposited on the platform.”

After disclosing the loss, Firano then allegedly told users they could, “recover ownership of the remaining 20% by waiving any legal actions against BitGrail and joining a repayment plan.”

Investors also claim that Firan, in fact, lost the funds in October 2017, three months before he informed them in a January 2018 notice.

Investors say this delay cause them to incur additional losses:

“The Court criticized Mr. Firano for not immediately taking steps to account for the losses. By waiting to make the shortfall public, Mr. Firano caused the public to suffer substantially larger losses. In July 2017, 2.5 million NANO was valued at approximately $250,000 (1/100th of the value it had in February 2018 when Mr. Firano went public).”

Firano also reportedly attempted to compensate affected investors by offering to repay them in, “a new cryptocurrency created by BitGrail (“BitGrail Share”)…on condition that they accept the settlement agreement proposed by Firano, whereby users would waive the right to be returned 80% of the Nano taken from their respective wallets.”

BitGrail now joins a list of numerous hacked or exploited crypto exchanges that blogger “Neuron” (writing 10 month ago) claims have collectively lost more than $15 billion in investor funds:

“More than 980,000 Bitcoins have been stolen from exchanges, which would be worth more than $15 billion at current exchange rates.”

According to Neuron, exploited exchanges include Mt Got (850 000 Bitcoins); Cryptsy (13,000 BTC and 300,000 LTC), Mintpal (3 894 Bitcoins), Bitstamp (19 000 Bitcoins), Bter (7000 Bitcoins), Bitfinex (120 000 Bitcoins), Nicehash (4000 Bitcoins), Coincheck (523 000 000 NEM worth $534 million at the time), Coinsecure (438 bitcoins), Zaif (5966 bitcoins), MapleChange (913 bitcoins), etc.

The current trading price of one bitcoin is ~$3481 USD (down from an ATH of ~$20 000 USD).



Sponsored Links by DQ Promote

 

 

Send this to a friend