BitGrail must pay back lost funds, Court orders

Posted 29 January, 2019

Italian crypto exchange BitGrail has to refund its users as much of money lost after the exchange hack as possible under the court decision as it was reported by the BitGrail victim's group (BGVG) this week.

According to the released BGVG report, the Italian Bankruptcy Court found BitGrail and CEO Francesco Firana bankrupt with further confiscation a significant part of Firano’s assets. The court order was made on January 21.

"In its decision, the court concluded that both Bitgrail and Mr Firano, personally, be declared bankrupt, authorizing seizures of many of Mr Firano’s personal assets," the report reads.

Following the order, the Italian authorities have already recaptured above $1 million from Firano’s personal assets. Several millions of dollars in cryptos were also withdrawn from the exchange accounts and transferred to a trustee appointed by the court.

BitGrail platform was found responsible for the lost $170 million as it "failed to implement any meaningful safeguards to ensure the “idempotency” of NANO withdrawals from the Bitgrail exchange." The developers of the Nano network were acquitted.  With this software gap, the requested funds could be received more than one time, as the court expert stated.

The exchange is said to have lost 2.5 million Nano in July 2017, 2.5 million. At the same time, Firano was aware of the situation and announced on Twitter that he had added the relevant addresses to the blacklist. Somewhat later, as the report shows, a similar incident occurred in October 2017 that caused another loss (7.5 million Nano). 

"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," the post reads.

In December, Firano transferred the remaining assets to a cold wallet, causing disruptions in the exchange’s operations. According to the prosecution, Firano moved 230 bitcoins from the exchange to his personal wallet within February 2-5 and only then announced about the incident. 

For reference, Italy's court banned the company from the resuming operations back in May 2018, following the petition filed by the victims.

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29 January, 2019 17:16

← Saudi Arabian-UAE joint cryptocurrency project goes to trial

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29 January, 2019 15:20

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