Fallout from the $170 million hack earlier this year of the Bitgrail exchange continues to mount, and this time lawyers are involved. A class action lawsuit was announced against Bitgrail’s Nano core development team, seeking damages and a “rescue fork” to recover funds. In response, a group calling itself Nano Foundation fired back, insisting blame for the hack rests not with developers but with Bitgrail itself, and they’re raising funds on behalf of victims to bring their own suit.
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Bitgrail Hack Fallout Means Lawsuits
Perhaps emblematic of where the cryptocurrency ecosystem is at present, the from earlier this year continues to provide drama. Back during 2017’s massive price run up, at the start of December (Nano was then known as Railblocks, under the ticker, XRB) “1 XRB could be bought for $0.20. One month later, 1 XRB had soared to $35 after gaining 17,500%, making it 2017’s biggest gainer and putting the likes of bitcoin, litecoin and ripple in the shade,” News.bitcoin.com reported.
Rather suddenly the Italian micro exchange was swimming in hundreds of millions in value. In late January of this year, Bitgrail abruptly suspended trading. Within weeks, the exchange announced an indefinite stoppage due to a 17 million XRB/Nano “shortfall” from a wallet it managed. It assured users authorities were alerted.
Rumors flew: The exchange’s charismatic owner had made off with the loot. Indeed, Nano core devs even alluded to at the very least mismanagement. Bitgrail publically implored its devs to change key aspects of the code in order to return coins to users. Back and forth the two sides have gone, but one thing is clear: 12.7% of XRB remains missing.
By March, Bitgrail announced a 20% return of customer Nano with the other 80% being made up in a new coin, BGS, on one condition: users, upon reanimating their accounts, would be required to sign away future legal claims against the exchange. It is unclear how many customers were eager to take up the offer.
Class Action, Legal Fund
This week, Bitgrail customer Alex Brola’s against four Nano core developers based in Texas. Mr. Brola’s initial $50,000 investment grew close to 17,000 Nano, according to court documents. His suit begins by attacking the entire project, defining Nano as a security thus placing those associated with its sale as violating US securities law. It then goes on to allege developers mislead Bitgrail users in nearly every regard, from the supposed integrity of the system itself against hacks, to Nano devs actively conspiring to ultimately achieve ill gotten gains.
Mr. Brola and the respective class of victims are seeking return of their coins and fiat investments, along with a mandated “rescue fork,” presumably to recover said coins, and restitution in the form of all damages incurred by Mr. Brola and the class as a result. They’d also like an audit, an accounting, and a trust set up for coin distribution, along with attorney’s fees paid in full.
In response, a group referring to itself as the claimed it was they who really represented hack victims, and that a legal fund was being established to bring action against Bitgrail exchange. They detail having formed an alliance with “Espen Enger, a representative of nearly 600 Bitgrail victims at the time — now over 1,400, announcing our plans to help establish a legal fund. We had a series of productive initial discussions with Mr. Enger. Over time we became confident that Mr. Enger was the best prepared person to manage a legal fund and a large group of Bitgrail victims in their pursuit of justice in Italy.”
Their stated goal is to help smaller investors. They claim to have doubled the victims’ legal fund from $300,000 to $600,000 as of 9 April 2018, while “will be matching the contributions of the victims to the legal fund established by Mr. Enger — including both past and future donations, for up to $1 million — with a goal of establishing a total legal fund valued at $2 million.” They’ve set up a as a way to keep tabs on their progress going forward.
Which side do you believe? Let us know in the comments section below.
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April 10th, Tallinn, Estonia — exchange has officially announced its launch with the support of 7 demanded cryptocurrencies: bitcoin (BTC), Ethereum (ETH), EOS (EOS), Tron (TRX), VeChain (VEN), OmiseGo (OMG), and Icon (ICX). Within the first month, new users are welcome to try out the exchange’s features with 0% trading fee, as well as receive bonuses in Cryptagio Tokens (CPG).
Cryptagio incorporates incomparably fast trading mechanisms, distinctively clear, user-friendly interface, multi-factor security system, and responsive 24/7 support infrastructure. Through acceleration of the exchange process, high liquidity, and easy-to-use API, the exchange will meet the needs of beginners and experienced crypto holders.
“We are committed to ensure a perfectly functional and consistently stable trading environment, allowing our users to create and develop much potent crypto portfolios in a strikingly fast, easy and safe way”, says Cryptagio’s CEO Sergii Vasylchuk.
The newly registered users will be able to trade for free during their first month. Every next month they will be charged a 0-0.25% trading fee, depending on volumes traded. Withdrawal fees basically cover only mining fees and, therefore, are the lowest on the market. The deposit fee will be fixed at 0%.
To bring more value to its users, Cryptagio has designed their own token. Unlike many others, Cryptagio token (CPG) was created with a single purpose of providing beneficial terms and gainful experiences within the platform. New users will gain bonuses for trading in CPG tokens, which can be later used to get a 50% discount on trading fee, or exchanged for other cryptocurrencies.
The platform was built in response to the rapidly growing demand for the most potent cryptocurrencies on today’s market. will start as a crypto-only exchange, initially supporting 7 digital assets, with the aim to add more in the nearest future. The platform is also going to introduce additional useful features, such as a mobile app, support of fiat money, FIX API, margin trading, PAMM, etc.
Contact Email Address
v.makarov@cryptagio.com
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Popular cryptocurrency exchange Gemini that is operated by the bitcoin billionaires – Winklevoss Twins, made an important of Monday of allowing block trading for bitcoin and Ether tokens which will be started later this week. The new feature is said to have been introduced to subside the effect of huge price fluctuations in bitcoin and Ether prices due to huge buy/sell orders.
Thus using this new feature introduced by Gemini, customers will be able to make high-volume trades that won’t be reflected in the exchange’s order book until the time they have been filed. This will allow the crypto ‘whales’ to continuously trade outside the exchange such that a single trade can have a collective outsized effect on the market.
The minimum threshold is kept for an order of 10 Bitcoins or 100 Ether tokens which means that this feature can’t be used by small traders. Geminin in its blog post writes that the block trading feature is a way to create “an additional mechanism to source liquidity when trading in greater size.”
All the transactions made using the block-trading platform will be placed in a 10-minute delay while ensuring that all the participants in the market get an access to pricing and liquidity information without having large immediate effects on the price. In its blog post, Gemini writes: “In accordance with our commitment to an equitable, transparent, and rules-based marketplace, block orders will be electronically broadcast to participating market makers simultaneously, ensuring best execution and price discovery for those participating in the program.”
The other option is to place the over-the-counter trade orders that take place outside the exchange by splitting trade orders into smaller chunks while further reducing the impact to supply and demand. Reuters recently that there are a few firms in the U.S who do such over-the-counter trades including Circle, Cumberland Mining (a division of DRW Holdings) and Genesis Global Trading.
Block trading is one of the most commonly used approaches by hedge funds and institutional investors in the stock market in order to reduce the effect of dramatically fluctuating prices in the open market.
While explaining how this block trading platform will function, Gemini in its blog post writes:
“Any customer can place a block order that specifies: (i) buy or sell, (ii) quantity, (iii) minimum required fill quantity, (iv) and a price limit (the ‘Indication of Interest’). Market makers only receive quantity, minimum quantity, and the collar price — they do not receive any other information (i.e., side, price limit, etc.) related to the block order. If a market maker agrees to ‘make a market’ that satisfies the Indication of Interest, the block order will be filled.”
This new feature is expected to Gemini and edge over its other competitors.
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