BitGrail
From Invertopedia, the encyclopedia of how things fail
BitGrail was an Italian cryptocurrency exchange run by Francesco Firano[1]. In February 2018, 17 million XRB coins, the token of Nano, were lost, worth around $170 million at the time[2][1]. An Italian bankruptcy court and a court-appointed technical expert found Firano responsible for the loss[2]. The exchange stayed shut and its remaining assets were seized[1].
What happened
| Jan 12 to 28, 2018 | According to court documents quoted by victims, Firano blocks withdrawals after the exchange loses 80% of the amount deposited.[3] |
|---|---|
| Feb 2018 | The loss of 17 million XRB, worth about $170 million, becomes public.[2][1] |
| Early Mar 2018 | Firano tries to reopen the exchange. A court shuts it again within three hours, on a request from a law firm acting for 3,000 clients.[1] |
| Later 2018 | The court seizes the company's remaining assets, to be managed by a special administrator.[1] |
| Jan 2019 | An Italian bankruptcy court and a court-appointed technical expert find Firano responsible for the loss of funds.[2] |
The kill shot
The court found that BitGrail had not put in the safeguards that would stop the same coins being withdrawn over and over, and that Firano waited months while users' losses grew.
Decrypt reported that all users on the exchange had their funds tied up, forced to HODL[2]. Investors also claim the funds were lost in October 2017, three months before the January 2018 notice. That is the victims' allegation, not a confirmed finding[3].
The inversion
An exchange that cannot count what it holds must say so the day it finds out. Waiting turns a loss into a bigger one for everyone with money on the platform.
References
- ^ “Arrivederci to BitGrail - Court of Florence Seizes Remaining Assets”. Finance Magnates. The operator, the February 2018 loss, the three-hour reopening, the 3,000 clients and the seizure of remaining assets.
- ^ “Court rules against BitGrail's 'The Bomber' over $170 million Nano hack”. Decrypt. The 17 million Nano and $170 million figure, the court finding that Firano was responsible, the missing safeguards, the months of delay and funds locked on the exchange.
- ^ “BitGrail Exchange Operator Who Lost $170 Million in Crypto Ordered to Return Lost Funds to Investors”. Crowdfund Insider. The withdrawal block in January 2018, per court documents furnished by victims, and the investors' claim that the funds were lost in October 2017.