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Italian Court Rules Bankrupt Crypto Exchange BitGrail Must Stay Closed

Last Updated March 4, 2021 5:08 PM
Josiah Wilmoth
Last Updated March 4, 2021 5:08 PM

Italian cryptocurrency exchange BitGrail won’t be reopening anytime soon, despite its wishes to the contrary.

Last Thursday, on May 17, the Court of Florence fully upheld a preliminary order barring the exchange — which is currently undergoing bankruptcy proceedings — from resuming operations and once again offering trading services to customers.

The precautionary measure was originally proposed by legal firm BonelliErede, which issued a statement announcing that the order had been upheld. The firm says that it is assisting more than 3,000 BitGrail users who are attempting to recover funds from the exchange, which once operated the largest trading market for nano (XRB).

As CCN.com reported, BitGrail revealed in February that it was insolvent after losing approximately 17 million XRB, then worth more than $170 million.

Exchange operator Franceso “The Bomber” Firano blamed the missing funds on the cryptocurrency developers, arguing that the fault was with the Nano protocol — not BitGrail. He unsuccessfully pushed for developers to roll back the blockchain to recover the funds.

The Nano Foundation, however, said in an update last month that “all reliable evidence” indicates that a bug in BitGrail’s exchange software is responsible for the exploit and that the cryptocurrency’s protocol is secure. The foundation has also established a legal fund to help victims take action to recover their assets.

Firano attempted to resume BitGrail’s operations on May 2 but was forced to shut the platform down just three hours later after a judge approved BonelliErede’s precautionary suspension request, pending the full hearing that took place last week.

A statement from BonelliErede indicated that the court had also seized the company’s remaining assets and appointed a special administrator to oversee them.

Meanwhile, Nano lead developer Colin LeMahieu told CCN.com in a recent interview that the project has continued to move forward, even as the community continues to deal with the incident’s fallout.

“While the BitGrail situation is extremely unfortunate, it has not impeded the project. We allocated significant resources towards both determining what exactly happened, as well as investigating legal options, but as far as protocol development and overall project milestones are concerned we have continued to move forward,” he said.

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