The Italian exchange where 80% of the cryptocurrency "Vanished" before anyone even found out (BitGrail)

Sometimes the most dangerous sign of fraud is silence. BitGrail stayed silent for months while client funds disappeared, and only a subsequent forensic examination revealed how long the truth had been concealed. For the thousands of traders who traded the Nano token here specifically for its low fees and convenience, this exchange seemed like an ordinary technical tool rather than a potential trap.

BitGrail was an Italian cryptocurrency exchange that specialized in particular in trading the Nano token and, within a few years, became one of the main venues for that coin in the world. The platform was run single-handedly by Francesco Firano, with no separation of powers and no independent audit of reserves — a model that seemed, at the time, like ordinary practice to users of a small niche exchange.

In February 2018, it emerged that roughly 80% of all Nano tokens had "disappeared" from the platform — worth approximately $170 million. At first, Firano publicly shifted responsibility onto a supposed vulnerability in the Nano network itself. A subsequent technical examination, ordered by an Italian court, refuted this version: the expert's conclusion showed that it was BitGrail itself which, due to its own coding error, repeatedly requested withdrawal authorizations from the network — rather than the Nano network arbitrarily permitting multiple withdrawals.

The investigation also established that withdrawals from the exchange had begun months before Firano publicly acknowledged the problem, and the police uncovered a transfer of 230 BTC to his personal account just a few days before the official announcement of the "hack."

When the truth came out, in January 2019 the Italian bankruptcy court declared both the exchange itself and Francesco Firano personally bankrupt. As part of the bankruptcy proceedings, about $1 million of his personal property was seized, including a car — a sum that amounts to only a tiny fraction of the declared losses. In 2020, the Italian cyber police brought charges against Firano for fraud, causing bankruptcy, and money laundering.

No final criminal verdict in this case was ever publicly announced, and full compensation of the victims' losses never took place.

Published 20 April 2020