Hacked Crypto Exchange Bitgrail Ordered to Cease Operations Shortly After Re-opening

Hacked Crypto Exchange Bitgrail Ordered to Cease Operations Shortly After Re-opening

Exchange News
May 3, 2018 by Henrik Bliss
1365
Italian-based cryptocurrency exchange BitGrail has again halted operations after momentarily re-opening most of its trading markets on Wednesday. The exchange, which has been mired in controversy since 17 million Nano tokens (XRB) — that is now worth an estimated $140 million — went missing in February, re-opened trading for all coins except XRB at 10:00
Hacked Crypto Exchange Bitgrail Ordered to Cease Operations Shortly After Re-opening

Italian-based cryptocurrency exchange BitGrail has again halted operations after momentarily re-opening most of its trading markets on Wednesday.

The exchange, which has been mired in controversy since 17 million Nano tokens (XRB) — that is now worth an estimated $140 million — went missing in February, re-opened trading for all coins except XRB at 10:00 UTC.

However, by 13:20, the platform had once again ceased operations. In a statement issued on its official website, Bitgrail noted that the shutdown was a response to a court order.

The statement read:

“This morning, following the re-opening, we were notified of a deed by the court of Florence requesting the immediate closure of BitGrail and this situation will persist until a decision is made by the courts, about the precautionary suspension request made by the Bonelli law office on behalf of a client.”

According to the statement, the request came with BonneliErede, an Italian legal firm that last week filed a petition for a BitGrail creditor who was looking to force the company into bankruptcy.

BitGrail owner Francesco Firano asserts that the “unauthorized transactions” that took the tokens from the exchange happened due to a fault in the Nano protocol, but developers — who once worked closely with Firano — claim that the exchange had been bankrupt long before the hack but that the exchange had hidden this fact as long as possible.

“To date, 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,” the Nano Foundation said in an update last month.

The Nano Foundation has backed a legal fund for BitGrail victims and has pledged to match up to $1 million in donations to the fund. The company itself has been involved in a class action lawsuit by an alleged victim who accussed the company of forcing developers to adopt a “rescue fork” to recover the lost funds.

Meanwhile, Firano has criticized attempts to force the company into bankruptcy, saying that it would lead to the “worst possible outcome for everyone involved” and eventually, won’t help victims recover their lost resources.

The court will hear the arguments of both sides before making a final decision on the possible bankruptcy of BitGrail. The decision has been scheduled for May 16 2018. In the meantime, trustees have been appointed to secure BitGrail’s assets.

 

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