BitGrail Exchange Godfather Accused of Faking Hack

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In Brief
  • Italian police have accused the former chief of BitGrail of defrauding his users.

  • Police said the suspect, known as Francesco Firano (FF), had faked a hack which resulted in the loss of $146 million in Nano.

  • Authorities believe that FF either planned the attack or let it happen as a way to allow the hack.

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Italian police have accused the chief of Rome-based cryptocurrency exchange BitGrail of faking a hack that led his company to bankruptcy. 

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The exchange was actually behind the attack which lost €120 million (~$146 million) worth of Nano, police say.

Fake Hacks Make Big Bucks

Don’t judge a hack by its cover. The 34-year-old acronymed suspect was accused of being behind an attack that left the Italian exchange BitGrail millions of dollars in the red.

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Police identified the man only as ‘F.F,’ however, journalists previously identified Francesco Firano in 2018 when he claimed that $195 million had been lost to hackers.

According to Reuters, police say the Florentine man may have instigated the fraud.

Not only did his exchange go south to bankruptcy, but authorities believe that Firano defrauded 230,000 people of their hard earned Nano cryptocurrency.

Nano offers low-transactions fees via an ever-forking blockchain known as DAG technology. As of writing, Nano’s market cap is around $141 million.

A Problem So Small It’s Nano

Through the middle of 2019, BitGrail was the only exchange offering Nano trading pairs. Until then, the site was responsible for the lion’s share of Nano trading.

Police described the hack as the “biggest cyber financial attack in Italy, and one of the biggest in the world.” They also said it was the first documented fraud carried out entirely over the internet via digital currencies in Europe.

Recently, European Police released a report warning of the dangers of cryptocurrency. They specifically singled out privacy coins like Monero and Zcash as culprits.

Giving Too Little Causes a Hack

Firano faces charges of computer fraud, money-laundering, and fraudulent bankruptcy. His defense team did not immediately comment.

At some point in an investigation, it became clear that the BitGrail boss was involved in this supposed loss, said Ivano Gabrielli, director of the National Center for Cyber Crimes.

Now, Gabrielli says it’s not immediately clear if ‘F.F.’ was an active participant in the robbery or if he was intentionally negligent at keeping security at an inadequate level after becoming aware of the attacks.

In fact, police believe it would have been easy to prevent the theft, and the vulnerability would have been easy to fix. Police accused him of knowingly failing to prevent the Nano hack that left accounts drained. The authorities believe he must have profited from the incident.

The Italian government and banks have generally been supportive of the crypto world. Banco Generali, one of the country’s largest banks, invested in a crypto custody service. The nation also allowed crypto derivatives trading of after a hiatus.

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Harry Leeds is a writer, editor, and journalist who spent much time in the former USSR covering food, cryptocurrencies, and healthcare. He also translates poetry and edits the literary magazine mumbermag.me.

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