Wednesday, February 8, 2023

BitGrail Set to Re-open Amid Sea of Controversy

BitGrail Set to Re-open Amid Sea of Controversy

With controversial Italian exchange BitGrail set to re-open only months after an alleged hack of $195 million USD worth of Nano, will anybody use it?

Also see: Toward Dystopia? China’s Social Credit System, Crypto, and What’s Next

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BitGrail Set to Re-open, Insists It Was a Victim of a Hack

BitGrail CEO Francesco ‘The Bomber’ Firano released a statement on March 14th announcing the impending resumption of trading on the exchange. With BitGrail set to re-open, the statement reiterated Firano’s insistence that the exchange was hacked:

“BitGrail Srl once again confirms that it was the victim of a theft…”

He went on to pursue the line of reasoning that insecure Nano coding was the cause of the hack, rather than flaws in the exchange’s security procedures:

“…the subjects involved in the fraudulent activity have exploited the vulnerability of the NANO software and not BitGrail software”.

The Nano Development Team Beg to Differ

The Nano development team strongly denied that their software is affected by any vulnerabilities to which Firano referred. Their own statement relating to the hack indicated their belief that suspicious trading activities at BitGrail date back to October last year:

“From the Unix time-stamps, we can, with sufficient confidence, date some of the transactions. They occurred between October 19–23, 2017.”

Firano first alerted the team to problems on February 8th. Only days earlier, BitGrail hastily informed non-E.U. customers they would be unable to continue using the exchange, and made it difficult for them to verify their identities and withdraw their funds.

With both parties engaged in an escalating row over who was responsible, we contacted both Francesco Firano of BitGrail and Zack Shapiro of the Nano development team for a statement on BitGrail’s re-launch and their ongoing feud. Shapiro has not responded to requests for comment. Firano was initially prepared to speak, tweeting in a private message “Yes tell me i will answer to all questions”. When presented with probing questions, however, he failed to follow up.

Firano’s Goodwill Gesture… At a Price

Despite continuing to deny responsibility, Firano has issued a new token called BitGrail Shares (BGS), which will be distributed to traders who resume trading on a one-to-one basis with Nano (XRB). Over time, BitGrail will buy back BGS coins from users, at a fixed price of $10.50 each, using 50 percent of the trading fees earned in the previous month. The buyback will be made in bitcoin.

That goodwill gesture comes at a price, however. Users will need to waive their right to take legal action against BitGrail in order to take advantage of the issue of BGS.

bitgrail set to re-open petro

Venezuela’s Petro currency is supposedly backed by barrels of oil. BitGrail Shares are backed by Firano’s promise to buy them back for $10.50 worth of bitcoin. With Nano now available on Kucoin and Binance, it remains to be seen whether the Nano community affected by the BitGrail hack will be prepared to resume trading on an exchange with a dubious past or cut their losses and move on. Or sue.

Have your say. If you were a victim of the BitGrail hack, will you resume trading and accept BGS as compensation? Let us know your thoughts in the comments below. 

Images via Pixabay, Voice of America

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