BitGrail Founder Under Attack, as $170 Million in Nano Still Missing

Photo: Source: Finance Magnates

 

Francesco Firano accused of theft, fraud and even faces death threats, following his response to the hack

Francesco “The Bomber” Firano, the founder and CEO of the Italian cryptocurrency exchange BitGrail, has come under attack on social media during the weekend. Firano has been in the center of hundreds of tweets and Facebook posts, alongside messages on Telegram groups and sub-Reddit discussions. Some accuse him of stealing the money, others seek revenge.

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BitGrail was in the news, after the exchange lost 17 million of Nano (XRB), worth some $170 million. At first, the exchange tweeted a laconic statement on Thursday morning, announcing it halted trade in XRB. In a statement issued later on its official website on Friday, BitGrail said that internal check revealed some “unauthorized transactions” that led to the disappearance of the money.

Rage, fury and death threats

In a statement published on BitGrail’s official Reddit page on January 30, 2018, Firano wrote: “Being the CEO of BitGrail, whatever “hits” the site, “hits” me. This is stressful and annoying. You can certainly understand it, partially at least.”

Along the lines of Firano’s words, the rage of BitGrail’s users was directed towards the founder and the face of the company. Most users are posting Firano’s personal contacts, with his mobile, email and even home address, urging people to express their rage in “every possible way”.

Some claim Firano is in fact behind the hack, and allegedly holds the missing money:

Others are trying to arrange a class action suite or to initiate a criminal investigation against the exchange

In some cases, some even threatened Firano in the most evident and blunt way

The Bomber responded to those threats by mocking them. “Important notice to anyone who threatens me with death, could you do it under this tweet? It starts to get tiring looking at all the posts.”

No reimbursement, no compensation

Most of the posts were furious over BitGrail’s unwillingness to find a way to compensate the victims. In its statement, the exchange noted that they have informed the authorities, including the police. Firano offered his sympathy to his clients and apologized. However, what their announcements were lacking (and still lack at the time of writing), is a resolution on reimbursement of the missing funds to their previous owners.

Firano himself attended to the issue of reimbursement on his Twitter user and stated

Most of the posts were furious over BitGrail’s unwillingness to find a way to compensate the victims. In its statement, the exchange noted that they have informed the authorities, including the police. Firano offered his sympathy to his clients and apologized. However, what their announcements were lacking (and still lack at the time of writing), is a resolution on reimbursement of the missing funds to their previous owners.

Firano himself attended to the issue of reimbursement on his Twitter user and stated:

Claims of insolvency

The plot thickened when Nano developer’s team have officially announced on their blog that the culpability was on BitGrail’s side. Furthermore, a leaked conversation between Firano and one of their developers, Zach Shapiro, allegedly proves that the missing money is a matter of insolvency (that’s been going on for several months), rather than a hack.

“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 Bomber dismissed their claims and attacked back, by retweeting this:

Too little too late?

BitGrail announced last December that it’s implementing a stricter KYC regulations to keep pace with the regulations. Later on, Firano stated that these restrictions have now become mandatory.

But most critics claim that this move, alongside other improvements were “too little too late”, as the exchange allegedly failed to meet security requirements.

The broader perspective

Crypto exchanges continue to be one of the most vulnerable links in the blockchain. The dangerous combination of storing enormous amounts of crypto-coins and allegedlly sub-par security meassures, makes them attractive targets for hackers, criminal organizations and even foreign governments.

Only last month, Japanese crypto exchange Coincheck was in the center of a scandal, when $723 million went missing, in what seems to be the biggest crypto theft in history. Unlike BitGrail, in Coincheck’s case, the exchange promised to compensate the theft victims at 81 cents to the dollar.

It is still unclear how will this current scandal unfold, but judging from Coincheck’s case, the regulator (or whether regulators) are expected to intervene, whether in a form of closer scrutiny or imposing fines on the exchange.

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