BonelliErede, the Italian law firm representing victims of the BitGrail crypto exchange hack, has filed a petition with an Italian court to declare the exchange bankrupt under article 6 of Italian Bankruptcy Law, a BonelliErede representative announced on reddit Friday, April 27.
The move represents the latest development in a war of words and lawyers that has exploded between BitGrail’s owner, Francesco “The Bomber” Firano, and the Nano Foundation, since the exchange reported the loss of 17 mln Nano (XRB) tokens (worth around $187 mln at the time it was reported, and $124 mln at press time). In an interview with CT, Firano claimed the theft dates to Jan. 19, but it was first reported Feb. 8, 2018.
According to a Medium post published by the BitGrailVictimsGroup, BonelliErede is filing the bankruptcy petition on behalf of a BitGrail creditor, Espen Enger, with whom over 3000 claimants have so far allegedly made contact. Most victims have reportedly told Enger that they “prefer an immediate accounting of BitGrail’s assets in bankruptcy,” fearing further depletion of their assets:
In filing for a declaration of bankruptcy, a decision has been made to trust the Italian legal system to resolve the conflict. We are confident that the Italian authorities are best equipped to require Mr. Firano to disclose the facts of what occurred […] [We] seek an equitable distribution of the assets rather than to permit private resolutions in which some victims might profit over others.”
In February, Nano developers posted an accusation that Firano had asked for the altcoin’s ledger to be modified “in order to cover his losses,” as well as allegedly “misleading” the community regarding the exchange’s solvency.
Firano riposted that the fault lay not with the exchange, but originated with Nano’s “totally unreliable” protocol, pointing to timestamp inconsistencies on the Nanode block explorer.
In mid-March, BitGrail pledged to refund victims, proposing to cover 80 percent of the losses by issuing its own newly-minted BitGrail Shares (BGS) token, with the remaining 20 percent in XRB. The caveat was that victims would need sign an agreement to forgo any legal action against the exchange.
The legal saga nonetheless took off in April, when a US class action lawsuit demanded that the Nano Core Team hard-fork the token’s protocol to compensate victims. Since then, Nano has decided to sponsor a legal fund to provide all BitGrail victims with legal representation, in collaboration with BonelliErede and Enger.
As per a February 18 Twitter poll by “The Bomber” himself, 79 percent of the 7,610 respondents on Twitter would prefer to see the exchange file bankruptcy, rather than reopened.
Previous crypto exchange breaches have produced various controversies over compensation, culpability and market ramifications.