BitGrail Denies Responsibility for Hack, Will Refund Coins "Voluntarily"

A Telegram group for victims of the recent BitGrail hack has revealed that the Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term does not consider itself to be responsible for the theft or obligated to return the stolen money. However it has prepared a plan to reimburse customers "voluntarily".

The information comes by way of a document apparently sent to the Telegram group by Francesco “The Bomber” Firano, operator of the Italian cryptocurrency exchange. In February it informed its customers that it had been hacked, and that 17 million units of the cryptocurrency Nano had been stolen.

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Nano, previously know as RaiBlocks, is a rising cryptocurrency. Its website claims transaction fees of zero and that it is "infinitely scalable". It currently accounts for about 2 percent of the trading volume at Binance, the biggest cryptocurrency exchange in the world at the moment, with more than 27 million dollars' worth of the tokens traded over the last 24 hours. The amount stolen from BitGrail was worth about 170 million USD.

For a number of reasons, some believe that the hack may have been an inside job.

Firstly, the amount that was reported stolen by the exchange changed several times. Secondly, users had been reporting difficulty in withdrawing funds for some time leading up to the event, as the exchange had been enforcing ever-decreasing withdrawal limits. Thirdly, and most importantly, a glitch which allowed people to withdraw more tokens than they were actually holding was discovered in October 2017, but not reported to the Nano development team until February this year.

The Nano team has distanced itself from BitGrail. It said in a statement published in Medium: "We now have sufficient reason to believe that Firano has been misleading the Nano Core Team and the community regarding the Solvency Solvency Solvency is defined as the quality or state of being solvent, relating to any individuals or businesses’ ability to pay off long-term debts including incurred interest.In essence, solvency is the ability of an entity to continue operations into the foreseeable future. Companies that become insolvent end up filing bankruptcy while solvency ratios can be performed by investors or analysts to evaluate a company’s ability to stay in business. How is Solvency Determined?Common solvency ratios used in Solvency is defined as the quality or state of being solvent, relating to any individuals or businesses’ ability to pay off long-term debts including incurred interest.In essence, solvency is the ability of an entity to continue operations into the foreseeable future. Companies that become insolvent end up filing bankruptcy while solvency ratios can be performed by investors or analysts to evaluate a company’s ability to stay in business. How is Solvency Determined?Common solvency ratios used in Read this Term of the BitGrail exchange for a significant period of time." Nano reported the theft to the authorities as soon as it was informed of it, something which Firano failed to do.

Nano also shot down Firano's request to modify the coin's code so as to make the stolen funds unusable. Nano said of this: "An option suggested by Firano was to modify the ledger in order to cover his losses — which is not possible, nor is it a direction we would ever pursue." Firano's response was petulant: "The devs, as you have guessed, don't want to collaborate."

Firano's laconic comments on the matter have not been popular online ("All those who threaten me with death, could they do it neatly under this tweet? It starts to get tiresome looking in all my posts"), but in his defence it seems that the breach was caused by incompetence on his part rather than nefariousness. I say this because he launched a Twitter poll shortly after the hack to ask whether the exchange should fail or re-open, which doesn't exactly suggest business acumen.

As further evidence of the character of the man, the Telegram group has released his statement in lieu of Firano himself: "He did not want us to share the whole doc, so we agreed with him that we can translate the document for ourselves and share a summary of it."

The summary runs thusly: the platform will introduce a new token called BGS (BitGrail Shares) which will be distributed amongst those who lost Nano tokens. At the end of every month, BitGrail will buy these tokens from customers at a rate of 10.50 USD per token. It will use 50 percent on the month's profits to do this.

In order to participate, customers will need to waive the right to sue the platform by signing a form and returning it to BitGrail.

The question that immediately springs to mind is, how much profit is the re-opened platform likely to make given the behaviour of its helmsman? But it has to be said that at least Firano's confidence in his enterprise has not been dented any. According to the document, he plans to expand BitGrail by adding new cryptocurrency pairs, improving the user interface, and introducing a mobile app.