Bitgrail and Nano a Quick Summary
After posting the news of Bitgrail's announcement yesterday I finally took the time to login and assess my account finding that I do now have some Nano (XRB) back in my wallet. A pittance of 20% of my holdings and a promise of 1:1 payment of Bitgrail Shares (BGS) if I relinquish any right to hold Bitgrail responsible for the Nano theft. (see below)
Bitgrail's position is that Nano's implementation allowed exploitation and the hack to take place. Nano still consider Bitgrail's owner as a suspect and believe the exchange had a withdrawal flaw that allowed for repeat withdrawals. Who is trustworthy? Personally I tend to lean to the Nano team's side as they have been seemingly above board in disclosing Bomber's attempts to cover up the hack.
As of 10 Jan the Bitgrail Twitter was stating that XRB "funds are safe" which appears to be far from the truth. Soon afterward Nano withdrawals were frozen, this occurring sometime before the hack was disclosed which is suspicious by itself. Users were allowed to withdraw without verification for months and then suddenly you needed a least Level 2 verification to get your funds out, and the minimum withdrawal was 10 XRB with a 1 XRB fee. The kicker being... only Bomber was allowed to verify accounts with a select team of staff, so the queues for this became long and drawn out, my own verification languished until the hack was announced!
Your only alternative? Liquidate your account to Bitcoin, the price of which was tanking as users lost hope and tried to run. By rights this process and the hack itself has made Bitgrail insolvent
Bitgrail Markets, Withdrawals and Deposits Are Still Unavailable
A quick look at wallets on Bitgrail presents any assets you may still have present. In my case 20% of my Nano holdings teases me and clicking to withdraw takes me to the offering announcement. In fact clicking any withdraw or deposit button, or Markets, takes you to the statement that you really have no choice. Accept the deal or close your account and get out.
The compensation deal on offer:
The users who have been damaged by the theft (Meaning solely and exclusively all the NANO owners on Bitgrail) can already see their 20% updated XRB balance and, at the same time, the remaining part (80%) converted into BGS.
Access and ownership to/of the BitGrail's token is granted only to users who will accept the settlement agreement, as stated in the next point.
The legal condition of BGS distribution is as follows:
AGREEMENT WITH THE USERS
With the reopening of the site, the use of the platform for the victims of the theft will --be bound by the signature of a settlement agreement--. The latter will be characterised by an expressed renouncement from the users to every type of legal action, and will have to be formalized through the compilation of a form. The last will have to be printed, signed and uplodaded with the attached documents.
Such renouncement will allow the availability of the BGS tokens above described. In denegata hypothesis, subjects who won't accept the settlement agreement will have no alternative except for the account termination in compliance with the TOSs.
Any Value Left In Bitgrail Markets?
Given the time that Bitgrail has been closed to trading any offer of trading their new BGS to other currencies and transferring them away seems empty. What market do we expect to hold up with users looking to escape as quickly as possible? Expect that once any trading markets return the prices will dive, if anyone is around to sell.
Bomber indicates that BGS will be valued at US$10.50 but I predict this will proceed much like Lightcoin Cash and soon become a penny coin.
Rule #1 Of Investment - Invest What You Can Afford To Lose
Bitgrail has been a lesson to the Nano team and all members, myself included. Blockchain developers can be scammed too and just because their choice of exchange seems to be legit anything can happen.
You read this warning everywhere in the investment world and I can vouch that the first time it happens to you it hurts a lot.