Exchange

Court Orders Bitgrail Founder to Return Funds to Investors

Finmax

After facing a lengthy scandal of a hack, Italian crypto exchange platform Bitgrail founder Francesco Firano is again into some difficulties.

Last year, on the exchange platform $170 million worth of the nano digital currency found to be “missing.” In the case, a court in Italy has sentenced that Firano was at fault for the loss of this fund on his exchange last year. The court has further ordered to return investor funds as much as he can. Firano also called as “The Bomber” is now “required to return as much of the assets to his customers as possible.”

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A group named BitGrail victim advocacy group (BGVG) posted a scanned court document on Monday, Jan. 28th. The document stated that both Bitgrail and Firano personally must declare bankruptcy and forfeit personal assets. The court’s ruling authorizes the seizure of Firano’s personal assets. Here, the Italian authorities have seized more than $1 million worth of assets, along with a luxury car. The post says, “millions of dollars in cryptocurrency assets have been seized from Bitgrail’s exchange accounts and moved to accounts managed by trustees appointed by the Court.”

The documents note that because of a software issue, BitGrail exchange kept requesting the node to allow the funds to leave the wallet. It also claims that Firano inefficiently dealt with security matters affecting the private keys of Bitgrail users. The court said that Firano did not use suitable safeguards to prevent unauthorized withdrawals of nano from the exchange. One more factor that harmed its security is the fact that the exchange platform stored all of its Nano cryptocurrency funds in a ‘hot wallet.’

The court stated that the duplicate withdrawals occurred on the exchange several times. Still, Firano did not warn his customers appropriately. Due to these unauthorized withdrawals, around 10 million nano tokens are ‘missing.’ One more shocking info is that a few days before revealing the $170 million ( 17 million nano) theft, Firano transferred 230 BTC (about $1.8 million at the time) into a personal account. Notably, two US-based law firms filed a lawsuit against the developers of Nano and BitGrail, some time ago.

Ruti Vora

Ruti regularly contributes in-depth news articles for leading cryptocurrencies. She contributes technical chart-based price updates and analysis pieces on world's leading digital currencies. She holds graduate degree in journalism.

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