BitGrail Crypto Exchange’s Bitcoin Wallet Seized By Italian Authorities

BitGrail Wallet’s Bitcoin Seized By Italian Authorities

An Italian court has seized bitcoin wallets belonging to shuttered cryptocurrency exchange BitGrail as part of the company’s bankruptcy proceedings, according to an official announcement published June 15.

A news update on the website in May declared BitGrail would reopen on May 2, 2018, but was closely followed by an announcement stating the Italian court of Florence had issued a deed “requesting the immediate closure of BitGrail” and that BitGrail would comply.

From the statement:“On June 5, 2018, pursuant to the Tribunal of Florence orders, the Bitcoins contained in the company’s wallets were seized and brought under control of the judicial authorities pending further Court decisions in the pre-bankruptcy proceeding.”

The seizure of BitGrail’s BTC follows a petition to the court filed by victims of the BitGrail hack, asserting that the exchange is bankrupt under article 6 of Italian bankruptcy law. The petition was filed on behalf of a BitGrail creditor, Espen Enger, whom over 3,000 claimants have allegedly contacted so far.

BitGrail has effectively been shut down since February, when founder Francisco “The Bomber” Firano revealed that nearly all of the platform’s nano (XRB) reserves — approximately 17 million XRB, then worth $170 million — had gone missing, forcing the exchange into insolvency.

There was much controversy over who was responsible for the missing XRB. Nano’s developers argued that a bug in the exchange’s software had led to the loss or theft of the funds and accused Firano of concealing BitGrail’s insolvency for an extended period of time. Firano, meanwhile, blamed the development team, alleging that the fault lay in the Nano protocol, not his platform’s software. The Nano Foundation concluded in April that there was a bug in the exchange software at BitGrail.

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