While the operating methods used in the various cases of hacks are quite similar in the crypto space, this one has a very special flavor. After more than a year of investigations, Italian police accuse the founder of the Crypto Exchange Bitgrail of tampering with hacks. He would have thus caused the bankruptcy of his company by this ploy to defraud his customers. More details below.
An almost perfect crime
34 years old and from Florence, Bitgrail owner known by the initials F.F. declared his company bankrupt in 2019. The previous year, he had contacted authorities in person to report the hack into his exchange and the loss of a large amount of nano coin. This one is nothing other than the native Bitgrail token and is owned by more than 230,000 exchange customers. Director of the National Center for Cybercrimes (CNAIPIC), Ivano Gabrielli immediately suspected F.F.’s involvement in this affair. The police who also followed this lead ended up accusing him for initiating the series of bogus hacks that caused losses of 120 million euros ($ 146 million) on the exchange.
Besides computer fraud, the owner of the exchange is also accused of fraudulent bankruptcy and money laundering. “For the first time in Italy and in Europe, we have documented fraudulent behavior to the detriment of investors carried out entirely on computer platforms and through the use of virtual currencies”, one can read in an official statement of the Italian police . She adds that it could be the biggest cyber-financial attack in Italy and even one of the biggest in the world.
What is the real role played by F.F. in this affair?
Although there are suspicions of fraud F.F., his guilt has not yet been clearly established by the police. It is based on damning findings made by the authorities in charge of the case during the inspection of Bitgrail’s facilities. Indeed, the police judge that it would have been easy to prevent hijacking and limit exchange losses.
A situation that led elsewhere Mr. Gabrielli to wonder if the owner of Bitgrail simply had decided not to strengthen security measures after finding out. On January 21, 2019, the party had already been ordered to return as many assets as possible to the exchange’s clients. The recovery procedure then made it possible to seize the personal assets of the person concerned for a total value of more than one million dollars.
This would be an unprecedented case if F.F.’s guilt were to be proven in this case and arguably a blow to the local crypto space. Indeed, the idea that promoters could themselves run their exchange to defraud customers would constitute a brake on the development of the sector.