Italian Bankruptcy Court Rules BitGrail CEO is Directly Liable for Millions in Customers’ Losses
BitGrail, a cryptocurrency exchange that was recently the subject of a second class-action lawsuit, has found no relief in an Italian bankruptcy court.
According to unverified documents published by a victims group, the Bankruptcy Division of the Court of Florence has ruled that Francesco “The Bomber” Firano is personally liable for losses incurred in the exchange’s early 2018 NANO hack.
The court had previously ordered the seizure of BitGrail’s crypto wallets. Now the funds within them have been moved to custodial accounts in order to be redistributed to clients who lost funds. Firano’s personal assets are mostly on the line as well. Authorities have reportedly seized over $1 million in assets from Firano so far, including his personal vehicle.
Crucial to the decision made by the court was its determination that multiple NANO hacks had actually occurred over the course of 2017. Instead of reporting losses to the public then, the exchange operator waited until February 2018 to tell anyone. According to the victims’ group:
The Court criticized Mr. Firano for not immediately taking steps to account for the losses. By waiting to make the shortfall public, Mr. Firano caused the public to suffer substantially larger losses. In July 2017, 2.5 million NANO was valued at approximately $250,000 (1/100th of the value it had in February 2018 when Mr. Firano went public).
As for the mechanics of the loss, the Court concluded that the exchange had failed to implement any meaningful safeguards to ensure the “idempotency” of NANO withdrawals […]
New Details Come to Light
Several new details of the BitGrail case came to light during the bankruptcy proceedings.