Another day and another exchange hack, or so they state. BitGrail is a dedicated Nano exchange. Nano has been re-branded from RaiBlocks, it is a DAG (Directed acyclic graph) based chain that was the first of its kind.

They managed to lose 173M USD worth of coins, which makes this one of the biggest crypto exchange hacks to this day. Binance, one of the largest exchanges currently, announced that they are looking into freezing deposits from identified malicious addresses.

As you can see on the dedicated BitGrail Reddit, the exchange had many problems previously. The exchange started out with no trade, withdrawal or deposit limits. Red flags were first raised when BitGrail first stopped some of the Tier 3 verified EU user’s withdrawals. People were already speculating that they were running a fractional reserve service, but no one had proof on these claims. A bit of time passed and BitGrail announced mandatory verification on the exchange meaning that people who previously used the Tier 0 account limits (0.5 BTC / day) got their coins frozen until they finished the process.

The second round of red flags came in when they announced that they will stop serving non-EU customers and will liquidate the altcoins found on those accounts and will only give out BTC for withdrawals. The claim was that this is part of a regulatory compliance process. After a community uproar the exchange decided that they will accept non-EU verification requests that came in after a certain time threshold and they will let all verified users withdraw, this in itself was a huge giveaway as they claimed the change in business policy was the result of legal pressure.

A lot of hardware updates, market outages and frozen markets followed until we finally saw the final reasoning for the problems.

Now just recently the Nano team put up an official statement regarding BitGrail and their insolvency. There are various materials acting as supporting evidence all over reddit and the community is already grouping for a pending lawsuit. BitGrail addresses are missing altogether 15 million Nanos, which is more than 10% of the total supply of the coin. Some speculate that it was an inside job by the main developer of the exchange as he was blackmailing the team for a hard fork of the chain, but in the end all that matters is that the coins are missing and there are people on the other end who would like to see them back.

We hope that this issue gets resolved as it affects a lot of people.