Italian Court Seized BitRail’s Cryptos

Cryptocurrencies can be considered as a young market. However, one of the main problems that should be addressed is security vulnerabilities. There are many ways investors are losing their money. It can be from a phishing scam or it can be from a cryptocurrency exchange.

As for BitGrail, the cryptocurrency exchange was hacked in February this year and lost around $170 million-worth of Nano. And with this, it has led to a major price crash for the cryptocurrency. On June 15, BitGrail made an announcement that “On June 5, 2018, pursuant to the Tribunal of Florence orders, the Bitcoins contained in the company’s wallets were seized and brought under control of the judicial authorities pending further Court decisions in the prebankruptcy proceeding”.

There was a news that BitGrail was going to reopen on May 2, 2018. However, the Italian court of Florence issued an immediate closure of the cryptocurrency exchange which the company obliged. In reality, BitGrail has shut down since February right after losing 17 million XRB that is worth $170 million. After the cryptos have gone missing, this forced the cryptocurrency exchange into insolvency.

Who is Responsible?

So who exactly should be responsible for this? Now, that’s where the controversy kicks in. According to the developers of Nano, there is a bug that has been found in the exchange’s software that led to the missing funds. And also, Francisco Firano was being accused of concealing BitGrail’s insolvency for quite some time. However, Firano blamed the development team of Nano. He says that it is the fault of the developers working in the Nano protocol and not really in his platform’s software.

According to the Nano Foundation, “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”.

Barred From Resuming Operations

There was an attempt by BitGrail to re-open. However, it was forced to shut down after just three hours. A lawyer that was acting in behalf of a BitGrail customer went to court to stop the company from opening.

BitGrail is currently going through the preliminary bankruptcy proceedings. There are already creditors trying to recover a portion of the assets that the company lost during the hack. Firano, however, fires back to the creditors for forcing the company to shut down and go towards bankruptcy court instead of opening up and earning back the amount of funds that they have lost.

Hacking is a Serious Problem

Security vulnerability is a serious problem. Cryptocurrency exchanges are constantly attacked. In fact, it is the reason why Japan has decided to make new rules when it comes to cryptos that are planning to start a business in the country.

If you will look at the recent hack that happened to a South Korean crypto exchange, you will realize just how these instances could scare investors and sell their cryptocurrencies. However, these incidences should become a wakeup call to regulators in order to protect the investors. There should be a standard that should be set that can increase the security of investors.