BitGrail Victims Now Want Exchange to Declare Bankruptcy

The BitGrail/Nano saga has taken another twist – a petition has been filed to an Italian court requesting that BitGrail declare itself bankrupt.

A quick recap of the situation so far:

Francesco Firano is an Italian national and the owner of a small-time cryptocurrency exchange called BitGrail, now inactive. One of the cryptocurrencies that the exchange offered for trading was XRB, the coin of a blockchain company called Nano.

In February users of the exchange were informed that 17 million units of XRP had been stolen, with an approximate value of 170 million USD. The cause of the theft is a contentious subject; Firano and the Nano team both blame each other.

Some evidence suggested that the money was stolen because of security flaws at the exchange, and Firano’s subsequent mishandling of the problem. Firano blames Nano software. He asked the Nano team to execute a hard fork of the coin in order to retrieve cutomer money, but Nano refused.

The Nano Foundation announced in April that it will be funding the legal expenses of the victims of the hack. At the same time however the victims went to court to force Nano to execute a hard fork. Their argument is that Nano is responsible for choosing to list its coin on an exchange with a faulty security protocols; evidence suggests that the Nano team knew about these issues but proceeded anyway because it was eager to start selling.

New development

One victim is now going to court on behalf of the 3,000 victims to force BitGrail to declare bankruptcy under article 6 of the Italian Bankruptcy Law.

According to a post written by the victim group in Medium, a Norwegian citizen named Espen Enger is organising the claims of the victims. He says that a majority would prefer immediate settlement of their losses than for the exchange to reopen and pay them back through business dealings, which Firano offered to do. In fact, Firano himself asked his customers which route they would prefer using a Twitter poll, and 79 percent answered bankruptcy.

Apparently they are not confident in his ability to pay them back.

The post concludes: “We ask that those who disagree with the decision to file for bankruptcy to respect their fellow victims and to refrain from acting in ways that could undermine the claims of their fellow victims. Most importantly, it is important to respect the judicial process. The victims of the Bitgrail exchange will be most effective in pursuing their interests when they are unified.”