BitGrail victims won’t be allowed to receive compensation in crypto

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Victims who lost money from the BitGrail hack, and subsequent bankruptcy of the cryptocurrency exchange, in 2018 need to resubmit applications for compensation if they want to be reimbursed for their losses. The liquidators overseeing the payout of claims have decided that they would prefer not to deal with digital assets, and any claims for being paid in the Nano currency, which suddenly disappeared that year, are now being invalidated. Only claims for euros will be accepted.

Italy-based Bitgrail was hacked in 2018, but not before there had already been calls for the exchange to shut down over questionable practices. That year, an Italian court sided with the crypto community, shutting down the exchange and confiscating its assets. However, it was already too late, as $170 million had gone missing in an apparent hack.

A year ago, an Italian judge ordered the exchange’s founder, Francesco Firano, to make good on all the lost money. Administrators were brought in to oversee the practice, and have been sifting through the rubble ever since. To date, it still isn’t known exactly how much crypto the exchange had in its possession when it went bankrupt after the hack; however, the closest figures put the amount at about 80% less than what had been deposited.

Because of fluctuations in values, the liquidators are trying to ascertain a legitimate and fair value in order to settle claims brought by the exchange’s users. They assert that this is only possible by assigned a value in fiat, choosing the euro as the accepted currency because if its use throughout the European Union, to which Italy belongs.

The claims will now be calculated in euros based on the holdings registered on the day the exchange declared bankruptcy. Some of these applications have been rejected for not following the required identification conditions or lack of evidence to support the claims, but these have the opportunity to dispute the denial as the settlement action continues.

Firano and the Nano development team blamed each other for the fiasco, with the exchange’s founder asserting that flaws in the blockchain’s code made it vulnerable and the team arguing that BitGrail was holding the tokens in a vulnerable wallet. Evidence was later uncovered that Firano’s management of the exchange contributed, and possibly worsened, any security weaknesses of the exchange.

Anyone who had tried to make a claim to be reimbursed in Nano, or who had their request denied, now has the ability to refile a claim. The liquidators have set a new deadline of March 6 for claims submissions and modifications, not giving some users a whole lot of time to make the necessary changes.