BitGrail Exchange Hacked For $170 Million in Nano (XRB)

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Italian cryptocurrency exchange BitGrail announced on Friday that it has lost 17 million Nano (XRB) tokens, formerly known as RaiBlocks in unauthorized transactions, purportedly illegal transfers of the coins from it’s platform.

The Alleged Attack

In a notice on its website, BitGrail mentions “unauthorized transactions,” and says it has notified the authorities of the apparent hack. It has also halted all withdrawals and deposits from the exchange.

“… Internal checks revealed unauthorized transactions which led to a 17 million Nano shortfall, an amount forming part of the wallet managed by Bitgrail,” the site post stated. “Today a charge about those fraudulent activities has been submitted to the competent authorities and now is under police investigation.”

Widespread Suspicion Grows

While it appears to be another high-profile cryptocurrency exchange hack, the circumstances surrounding the alleged BitGrail attack have been met with skepticism after the founder of the exchange made an odd request to the developers of Nano shortly after discovering the alleged theft.

According to a Medium post from the Nano team, BitGrail founder – Francesco “The Bomber” Firano offered a controversial solution for his $170 million problem. “An option suggested by Firano was to modify the ledger in order to cover his losses — which is not possible, nor is it a direction we would ever pursue,” the Nano Dev team writes.

Nano team claims there has been no technical issues with Nano’s underlying ledger. “The problems appear to be related to BitGrail’s software,” the announcement said.

Furthermore, the Nano team said that “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 claim is supported by security researcher Tony Arcieri, who claims that BitGrail was hacked due to poorly implemented security. “The checks for whether you had a sufficient balance to withdraw were only implemented as client-side JavaScript,” he wrote.

Ongoing Suspicious Activities

On Reddit and Twitter, BitGrail users stated that something suspicious may have been going on for a while. According to some users, BitGrail has made it progressively harder for users to withdraw coins from the exchange, starting in December of last year.

Firano fired back on Twitter, calling these accusations “unfounded,” and said the BitGrail team will be pressing charges against the Nano team due to “irresponsible behavior.”

Moving Forward

While many suggested that BitGrail is insolvent in more than just XRB, this has not yet been confirmed by any source or Nano’s ongoing investigation. Irregardless, this alleged hack would leave the exchange insolvent, as Firano reveals that BitGrail only has 4 million Nano (XRB) tokens in reserve to cover losses.

The BitGrail hack is the second major cryptocurrency hack this year. Last month, hackers made off with more than $500 million worth of NEM tokens stolen from Coincheck, a Japan-based cryptocurrency exchange. The coins have yet to be recovered and the perpetrators remain at large.

For now, we can only wait for ongoing investigations to be completed. Until then, none of us can confirm whether this incident is indeed a cyber heist or maybe an exit scam.

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