BitGrail Loses $170 Million Worth Of Digital Tokens
BitGrail, an Italian cryptocurrency exchange, has reportedly lost 17 million Nano tokens (XRB) worth an estimated $170 million. Notably, the company did not use the word “hack” to describe the incident. Instead, the exchange attributed the loss to “unauthorized transactions” conducted on the trading platform. To make matters even worse, Francesco “The Bomber” Firano, owner of BitGrail, stated that his company would not be able to return all the money lost by its customers. The reason for this is that the company claims it only has $40 million worth of Nano tokens left.
Per the exchange, only Nano tokens were snatched from BitGrail’s wallets and all other cryptocurrencies were not stolen. Soon after the loss, the company said that it had reported the incident to authorities. Furthermore, the crypto-trading exchange has blocked all deposits and withdrawals “in order to conduct further verifications”. In response to this event, the Nano team stated that the loss was not because of any issues with their protocol. Moreover, Nano’s team asserted that they did not find any instances of double spending on their blockchain. They also claimed that there seems to be something wrong with BitGrail’s software.
Too Many Complications & Allegations
Presumably, in an attempt to comply with upcoming crypto regulations, BitGrail customers were recently asked to complete an account verification process. This was made compulsory for any user who wanted to withdraw coins whose value exceeded a certain amount. Additionally, the exchange decided to limit its services to only EU residents because of “legal complications”.
Tensions between the Nano team and BitGrail’s owner have been escalating since the last few months. Per the Nano’s group, Mr. Firano has been “misleading” them about his exchange’s solvency for quite some time. However, Mr. Firnano has responded by saying that these accusations are “unfounded“. He has even stated that Nano’s developers leaked private conversations, which could affect investigations performed by authorities. Because of this, he claims that he has asked the police to protect BitGrail’s users.
Nano’s XRB Token Drops Significantly
Primarily due to BitGrail’s insolvency, the value of Nano’s XRB token has dropped significantly. In fact, its value has decreased by nearly 20% (CoinMarketCap). Clearly, these types of incidents have the potential to be quite damaging to the cryptocurrency market.
The new year has just begun and digital tokens worth hundreds of millions of dollars have already been reported stolen twice. On January 26th, 2018, the Japanese Coincheck exchange was hacked and $534 million worth of NEM tokens were wiped off the trading platform. Given the severity of these losses, investors must realize that they need to be a lot more careful with where they invest and keep their funds. Crypto-related technology also needs to be improved, especially the security features.