Cryptocurrency Exchange BitGrail Insolvent Following $170 Million Hack

Italian cryptocurrency exchange BitGrail has revealed that it is insolvent following a $170 million hack.

BitGrail Hacked for $170 Million Worth of XRB

On Friday, BitGrail, which is headquartered in Florence, announced on its website that it had discovered “unauthorized transactions” that resulted in the theft of 17 million Nano tokens (XRB), which were formerly known as RaiBlocks. At the time of the theft, these tokens were worth $170 million.

BitGrail owner and operator Francesco “The Bomber” Firano stated on Twitter that the company could not fully-reimburse customers, as the exchange is now in possession of just 4 million XRB. This indicates either that BitGrail was storing the majority of its funds in internet-connected “hot wallets” or that the theft was an inside job, as the perpetrator would have needed physical access to steal funds stored in cold storage.

The Nano developers quickly moved to warn other cryptocurrency exchanges about the theft so that they could prevent the hackers from laundering the stolen funds.

BitGrail, Nano Blame One Another for Theft

Meanwhile, BitGrail and Firano claimed that all other funds were secure, and said that it had notified the relevant authorities about the theft. He said that the only way to return customer funds was to fork the Nano blockchain, and he lambasted the Nano Core developers of resisting this solution.

However, in a withering blog post, the Nano developers accused Firano of concealing BitGrail’s insolvency.

“We now have sufficient reason to believe that Firano has been misleading the Nano Core Team and the community regarding the solvency of the BitGrail exchange for a significant period of time,” the post said.

Nano Core also posted a transcript of chat logs with Firano, who appears to have threatened to tell customers that the theft was the result of a bug in the XRB protocol.

Notably, the BitGrail theft comes just weeks after Japanese exchange Coincheck was fleeced for $530 million worth of NEM tokens (XEM) in what is now the largest cryptocurrency theft in history. In both of these instances, the thieves targeted wallets holding cryptocurrencies with smaller market caps, instead of large-cap coins like bitcoin or ethereum.

David Murray

David has been following the development of cryptocurrency technology for several years, and he is optimistic about its potential to democratize the financial system.

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