Business 24 May 2018Gerald Fenech
Court orders Italian exchange BitGrail to remain shut
Defunct Italian cryptocurrency exchange BitGrail has shot its bolt and would not be reopening anytime soon—on court orders.
A week ago, the Court of Florence upheld a preliminary order barring the exchange from resuming any operations and offering trading services to customers, according to reports. BitGrail is currently undergoing bankruptcy proceedings which only hurt its case to move forward. The situation for BitGrail is now a dire one as with the reputation of scams and fraudulent ICOs in the crypto space, such a test case can only reinforce its demise.
The precautionary measure that was upheld by the Italian courts was originally proposed by the legal firm BonelliErede, which announced the court’s decision. Several weeks ago, the Italian law firm filed a bankruptcy petition on behalf of BitGrail creditor Espen Enger, who allegedly was in contact with more than 300 claimants. According to BonelliErede, it is currently providing legal advice to over 3,000 BitGrail user seeking to recover their funds from the exchange following a multi-million-dollar hack of Nano (XRB) coins. Previously, BitGrail was known as the largest market for Nano coins and had operated a brisk trade in this currency with thousands of investors amongst its clients.
BitGrail had announced insolvency way back in February when it reported losing around 17 million Nano coins, worth more than $170 million at the time. Francesco Firano, operator of the embattled Italian exchange, blamed the missing funds on the developers of the Nano protocol, saying that he asked them to roll back the blockchain to recover the funds.
The Nano Foundation strongly refuted these claims, however, and insisted that all reliable evidence proved that there was a bug in BitGrail’s exchange software, which developers said was responsible for the exploit. The foundation has since created a legal fund to assist victims to take action in the recovery of their assets.
Firano had tried to resume BitGrail’s operations on May 2, but was immediately forced to shut down the platform after a judge approved BonelliErede’s precautionary request pending a full hearing, which eventually took place last week. A further statement from the legal firm also indicated that the court had seized all the company’s remaining assets and had also appointed a special administrator to oversee same.
In an interview with CCN, Nano lead developer Colin LeMahieu said the project continued to move forward, noting that the fallout from the hack “has not impeded the project.”
“While the BitGrail situation is extremely unfortunate, it has not impeded the project. We allocated significant resources towards both determining what exactly happened, as well as investigating legal options, but as far as protocol development and overall project milestones are concerned we have continued to move forward,” LeMahieu told the news outlet.
Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.
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