Crypto-Wars: Bitgrail Hits Back at Dev Team After $170m ‘Theft’

Crypto-Wars: Bitgrail Hits Back at Dev Team After $170m 'Theft'

A war of words has broken out between a little-known Italian crypto-currency exchange and the development team of the Nano currency over a suspected theft of around $170m.

Bitgrail posted a note on Friday claiming that it had temporarily suspended withdrawals and deposits and contacted police after noticing unauthorized withdrawal from the firm’s digital wallet to the tune of 17m Nano, a digital currency formerly known as RailBlocks.

Reports then emerged that Bitgrail founder Francesco Firano had asked the Nano development team to fork the currency in order to restore the stolen funds.

The team responded angrily in a blog post in which it said it was preparing evidence including blockchain entries, chat logs and screenshots for the police.

“In our conversation yesterday (which you can find attached here, this link has been edited to redact a private email.), Firano informed us of missing funds from BitGrail’s wallet. 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,” they said.

“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.”

Rumors had broken out that Bitgrail may be trying to scam its users after a decision to update its terms of service, effectively ending support for non-European users.

Firano has now responded in a new statement claiming he has filed a complaint for aggravated defamation against the Nano developers for their comments.

He also claimed that the bugs exploited by the hackers were not attributable to Bitgrail software, and that the firm was readying a recovery plan.

High-Tech Bridge CEO Ilia Kolochenko claimed it was too early to tell who was in the right.

“I would not blame anyone prior to a rigorous technical investigation. Many blockchain start-ups simply neglect and carelessly disregard the fundamentals of cybersecurity,” he argued.

“Their negligence cannot help but attract cyber-gangs who can steal their crown jewels with almost absolute impunity. Money laundering with digital coins is also pretty simple. I think, 2018 will mark more notorious cases of similar incidents.”

Source: Information Security Magazine