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$170 Million: Cryptocurrency Exchange BitGrail Loses 17 million Nano (XRB)

Last Updated March 4, 2021 5:04 PM
Lewis Gray
Last Updated March 4, 2021 5:04 PM

BitGrail was the fifth most popular exchange for XRB trading according to Coinmarketcap, however the volume has now been amended to zero. With a market valuation today of $10 per XRB, the to, al loss is estimated to be $170m.

The Nano Core team were informed by the owner of BitGrail, Francesco “The Bomber” Firano of the loss on Thursday. In a blog update  they report that the fault appears to be related to BitGrail’s software. In private correspondence, Firano allegedly inquired as to the possibility of modifying the ledger in order to cover his losses, but the development team responded that this line of action:”[I]s not possible, nor is it a direction we would ever pursue.”

The blog posts then makes subtle accusations regarding the legitimacy of the hack, stating that:

“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 team adds that criminal investigations are underway:

“Our team promptly contacted law enforcement and we are fully cooperating with law enforcement on this matter….We are preparing all information we have on the matter such as blockchain entries, screenshots, and chat logs”

Following the loss of XRB Bitgrail has claimed insolvency and is not in operation, whilst unofficial sources claim that the exchange had been insolvent months earlier. The source in question claims to have discovered that the account from which user funds had supposedly been lost funds, (BitGrail Representative 1), had multiple transactions of large even numbers, (e.g. 3000, 5000, 8000 XRB) to the Mercatox exchange. He/ she describes this behavior as suspicious, adding that:

“It certainly doesn’t look organic.”

Another user took to Reddit, conducting an AMA post (As Me Anything) titled “I lost 147k Nano ($1.4 M and falling) in the Bitgrail hack.”  The user responded with surprising positivity to the terrible news:

“I’ve decided that the only way to deal with this is to move on as quickly as possible and keep making solid decisions. Negative emotions in times like these serve no one. I will continue to invest in cryptocurrency to the degree that I believe it has potential, and if it does, the worst decision I can make right now is stopping. I will be much, much more careful with exchanges in the future.”

When commended by other uses for his/her mental fortitude, the user outlined a community-minded approach, putting others before themselves:

“I hope that by doing this AMA, I can help some other people who lost funds understand how to respond in a healthy manner. The only thing you can do is continue to make rational decisions that do you & others the most good. If money makes you do terrible things, it matters too much to you.”

This approach sets out a responsible and healthy attitude to the financial loss that sadly is frequently experienced in the cryptocurrency world. It comes as a reminder to keep financial matters in perspective, contrasting with the sad news that a young Korean Bitcoin investor committed suicide  due to the recent crypto crash.

Nano (XRB) was previously known as RaiBlocks. It uses a DAG (Directed Acyclic Graph) protocol similar to IOTA, with zero fees and scalability advantages. There is a maximum supply of 133 million coins which are all in circulation, and so the breach represents a loss of over 10% of the total supply.

Users of the exchange had been reporting issues prior to the event, with many waiting for identity registration. Many users also reported being unable to withdraw their XRB from the exchange. BitGrail had been a popular choice for Nano investors, as one of the first exchanges to open trading on the coin.

Featured image from Shutterstock.