The Italian cryptocurrency exchange BitGrail has become the second such exchange this year to have lost a significant amount of money at a time. The exchange lost $170 million in fraudulent transactions.
BitGrail says that it lost its $170 million as a result of incorrect transactions. The currency was in the form of Nano tokens, the digital coins that were once known as RaiBlocks.
All deposits and withdrawals with BitGrail have been suspended until further notice. BitGrail is aiming to figure out how the group lost its money and is aiming to expand its verification process to ensure such incorrect transactions that caused the loss can be prevented in the future.
This marks the second time a cryptocurrency has lost a sizeable amount of money. Coincheck lost at least $530 million in an online attack last month.
The main difference though is that Coincheck has stated that it is looking to reimburse its clients for the losses that took place in the attack. BitGrail has openly admitted that there is no way how the firm can fully refund everything people lost. This is due to the firm not having enough money to use for paying back people who lost so much.
Issues Amid Controversy
The concerns surrounding BitGrail have been embroiled in any ongoing issues. The people behind Nano stated that BitGrail’s software program appears to be a major part of why all these losses took place and why the exchange was open to fraud. Nano argues that there are no problems with its ongoing protocol.
BitGrail had also drawn criticism in recent time for asking its users to verify their accounts so they can withdraw coins beyond a set total amount. There are also reports that some people have been waiting since December to get their verification plans handled correctly.
BitGrail’s client base also shrank recently when the group announced it would no longer serve customers from outside the European Union. The group said that non-EU users have become significant legal concerns in recent time, thus making it harder for them to be able to handle the transactions supported by BitGrail.
This led to Team Nano arguing that the BitGrail team has misled Nano over how well the exchange is run.
BitGrail founder Francesco Firano stated on Twitter that BitGrail does not have enough funds to reimburse people for their losses. He states that the firm only has a few million dollars worth of currency on hand to manage transactions. He also says that the developers that BitGrail has been working with are not willing to cooperate with BitGrail on trying to resolve the issue.
Impact on Nano
Nano has not experienced any significant changes in its value as a result of this issue with BitGrail. The currency has been trading at around the $10 mark for the most part during the past week. The currency had been hurt by the ongoing decline in the cryptocurrency market as it is now less than half of what it was originally worth a month earlier.