Italian digital currency exchange BitGrail has found itself in a tight fix after Italian authorities seized all Bitcoins (BTC) that it had stored in its wallets.
The Bitcoins were seized after an order by the Court of Florence amid reports that the exchange was on the brink of bankruptcy. An official statement published a few days ago revealed that the Court of Florence issued a court order on June 5 although it is not clear the amount of Bitcoin that was held by the exchange.
“On June 5, 2018, pursuant to the Tribunal of Florence orders, the bitcoins contained in the company’s wallets were seized and brought under control of the judicial authorities pending further Court decisions in the pre-bankruptcy proceeding,” pointed out BitGrail in its report.
The digital currency has been seized from the crypto exchange after victims of the BitGrail hack filed a petition to the court claiming that the exchange was bankrupt under the Italian bankruptcy law. The hack reportedly took place in February this year, leading to the loss of Nano (XRB) worth roughly $170 million, causing the price of the digital coin to crash.
BitGrail had initially planned to reopen but a deed issued by the Court of Florence revealed that the Italian cryptocurrency exchange would comply with the order for immediate closure of its services. Francesco Firano, the founder of BitGrail released a statement in February after the hacking incident stating that the weight of the accusations has convinced him that it is better to declare bankruptcy and allow the law to take its course.
Impact on users
Some of the users of the crypto trading platform expressed their disappointment in the court’s decision to seize the Bitcoin rather than letting the exchange sort out the issue. Users can no longer access their funds. It is currently not clear whether BitGrail will make a comeback but if it does, then it will need to make some changes that will strengthen the security of its trading platform. This will go a long way towards sealing the vulnerabilities and preventing such incidents from repeating themselves in the future.