Business 18 June 2018

Gerald Fenech

Italian gov’t confiscates Bitgrail’s crypto assets

The much-maligned investors of Bitgrail have suffered yet another setback, following announcements that the Italian courts have seized the assets of the embattled cryptocurrency exchange as the firm’s bankruptcy proceedings continue. The cryptocurrency ecosystem is continuing to grapple with this fallout from the multi-million-dollar NANO hack that left several hundred investors in the lurch, and now there appears to be little hope that they will be getting any of their investment back.

On its website, Bitgrail announced that during the June 5 hearing, “the Bitcoins [BTC] contained in the company’s wallets were seized and brought under control of the judicial authorities pending further court decisions in the prebankruptcy proceeding.”

The announcement means that the cryptocurrency is now in the hands of the Italian authorities and there will be very little chance for Bitgrail clients to recover their investments. Predictably, the situation triggered a storm of reaction across social media platforms.

On Twitter, user @LucChase irately tweeted, “Very bad news to see the court seized the remaining assets. Which idiot thought bringing the courts in could ever be a good move? We need Bitgrail to trade it’s way out of this mess. Now it is a guaranteed loss.” @Bitgrailed was also extremely angry, claiming asset seizure was “Better than in your hands Firano.” @asael2 asked, “Somebody know where these criminals live? Local authorities should be notified!”

@LookItsLewis was slightly more reasonable and sensible in his tweet, “Wow … and so everyone who predicted all of your funds would disappear and you’d shut down were correct. You should have let everyone withdraw their currency while there was still time. This is now (as if it wasn’t already) officially your fault.”

The Italian court’s asset seizure appears to be already a foregone conclusion—after the declaration of bankruptcy comes the determination of findings with the eventual redistribution of what remains to those outstanding creditors and victims.

Bitgrail has had a disastrous 2018 and was more or less shut down as far back as February. Initially, the shutdown was claimed to be the result of a Mt. Gox-like hack, which cost the crypto exchange 17 million NANO (XRB) worth at least $170 million.

Francisco Firano, the exchange founder who announced the insolvency, blamed the loss on the currency’s development team and their failure to make the token secure. However, the developers put the blame on Bitgrail, stating that “all reliable evidence we have reviewed continues to point to a bug in Bitgrail’s exchange software as the reason for the loss of funds.”

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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