BitGrail Sees All the Bitcoins it Stores Seized; Just One More Headache for the Exchange

BitGrail’s bad luck streak continues with the latest hurdle it must overcome being one with legal ramifications.

Earlier this month, the Court of Florence seized all the bitcoins that were stored in the wallets of the Italy-based crypto exchange. The exchange was one of only a few places for a recently rebranded token now called Nano to be traded.

Here, we’ll go over the issues.

When it rains it pours

Here’s an excerpt from the statement on the matter:

On 5 June 2018, under the provisions of the Court of Florence, the Bitcoins contained in the company's wallet were seized and placed under the control of the judicial authority, pending further action by the Court of Florence in the pre-bankruptcy proceedings.

This seizure comes on the heels of a hack of BitGrail that caused it to lose 17 million Nano, which was estimated to be worth roughly $187 million at that time.

Questions remain over whether hackers were able to infiltrate BitGrail due to weakness in it securing its systems, or whether it was due to weaknesses in Nano’s Blockchain.

Lawsuit pending

So upset about losing their money due to the hack that some people sued. Observers say the hack contributed to BitGrail’s poor financial situation, and they’ve gone so far as to claim the exchange is bankrupt.

The petition was reportedly filed on behalf of BitGrail creditor Espen Enger. More than 3.000 claims have been racked up so far.

Shut down

The hacking debacle led to the exchange being shut down for a while. However, it reopened at the beginning of May only to shut down again within hours to comply with court orders.

Here’s another excerpt from the exchange’s statement:

Even though we don't agree with this decision, we are obliged to respect the law and to suspend any BitGrail business immediately.

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Early problems

We reported to you in February about BitGrail’s observers being curious about some potentially damning issues that may be at play.

One related to BitGrail’s owner trying to manipulate the exchange’s developers. Some accused him of asking that the coin’s ledger be altered. The anxieties are based on a thread of communications that happened beginning, Thursday, Feb. 8.

We’ll keep you posted on what happens next.