One of the Italian courts ruled that the currently non-functioning BitGrail exchange and Francesco Firano the majority shareholder of the firm have been declared bankrupt. The court also declared and that assets of the firm and Francesco Firano are to be seized so as to repay its disposed customers. The victims of the BitGrail exchange have called this decision “a massive win for crypto customers” and “a tale to learn for the owners of cryptocurrency exchanges.”
In January last year, nearly around 17 million Nano (NANO) tokens which were at that time named as ‘RaiBlocks’ were found to have gone inaccessible to exchange users. These specific tokens are worth $14 million USD at current market price, but in January last year before the loss, these same tokens were worth $595 million USD. Till date it has not been found that made the tokens go missing. The Italian court said that it was totally the responsibility of Firano to take care that things went smoothly and hence he is held responsible and he has to pay back as much as he can.
There are four major possibilities as to why the token of RaiBlocks went missing, the first is that a critical bug in the crypto asset allowed hackers to withdraw more tokens than they actually held on the exchange platform. Second is that the exchange platform itself had a bug which was exploitable and it allowed the theft of the tokens. The third is that the exchange platform had more of a traditional sense and hence it was hacked and the tokens went missing. The final possibility is that the entire operation was an exit scam and that Firano escaped with the RaiBlocks tokens. But it looks like in the eyes of the Florence bankruptcy court, none of that is really important. According to their opinion, Firano is responsible for all possibilities of bugs with the software, and making the required changes to keep a check on bugs.
The court wrote,
“As cryptocurrencies are fungible assets, after the users’ cryptocurrencies were transferred to the main BitGrail address […] no information was available in relation to their owners. This means that the deposit was an irregular deposit, and that the custodian was obliged to make available to the holders the full quantity originally deposited, with a 100% cash ratio.”