The Bitgrail Exchange, down $ 170 million. Hack or deception?

The Bitgrail Exchange, down $ 170 million. Hack or deception?

Bitgrail is an Italian exchange that ranks 5th in the volume of transactions with Nano (formerly Raiblocks – XRB) and was set up by Francesco Firano. In January, Bitgrail announced that there are problems with XRB withdrawals and on February 9, the exchange owner posted on Twitter that 17 million Nano (estimated at $ 187 million at that time) were stolen following a hack.

Francesco Firano contacted Nano developers and requested the change of the ledger to cover the claimed losses, immediately refused by them. In a later statement, Nano developers said that “there are indications that Firano misled the Nano team and the community about the Bitgrail exchange solvability for a long time” and that they have announced authorities to conduct an investigation into this situation.

Nano has fallen by 20% over the past two days, especially since Bitrail’s sum represents more than 10% of the total available XRB on the market.

As a result of the loss, the Bitgrail exchange declared insolvency and was no longer operational, but unofficial sources say the situation has not been positive for several months.

An unofficial source claimed that one of the Bitgrail wallets has seen frequent and suspicious rounded transactions (3000, 5000, 8000 XRB) over the Mercatox in recent months. Currently, users are not able to withdraw funds.

The Bitrail incident occurs just two weeks after the Japanese Coincheck exchange lost XEM worth $ 534 million. Also in that case, currency developers refused to alter the registers to cover losses, but implemented a notification system so if attackers try to move stolen amounts or convert them into other currencies, transactions will be recorded as ” tainted funds.

Such situations highlight two major problems of cryptocurrency: exchanges need to implement better security systems, and developers need to identify solutions to counter theft. The solution adopted by XEM is much more advantageous than altering the ledger, but requires involvement and goodwill from developers.

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