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Italian authorities seize BitGrail bitcoin

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BitGrail sinks slightly deeper into the hole of missing funds.

BitGrail hasn't made many friends in the last year. After some careless coding and the subsequent theft of $170 million worth of Nano, it found itself caught between angry users on one side and suspicious authorities on the other.

Deep in the hole, it made an unsuccessful and tone deaf attempt to come back to life and bring back users, but was soon beaten back by impending legal action.

Undeterred, it came back to life anyway and reopened for a few hours of heavy trading at the start of May before Florence authorities ordered it to close its doors again. That last reopening may have spurred on the newest development.

Italian authorities have now seized the exchange's bitcoin holdings on the grounds of genuine concern for its remaining assets following BitGrail's ill-advised reopening.

The move is another nail in the coffin for the exchange and might be another small step towards the conclusion of the BitGrail-Nano saga.

It might be good news for those who lost funds in the initial Nano incident, suggesting that there's a chance of getting even some of their funds back. Affected users have joined together in legal action, launched within Italy for better results, but anyone who lost funds in the incident can put their name on the list of complainants and potentially receive some of their funds back when it comes to a head.

The legal action is being supported by Nano developers, who have started a fund to match other user contributions.

On the other side, there's a considerably less enthusiastic and more interesting class action lawsuit being launched in the USA against Nano developers, which similarly invites all affected users to take part.

In what might be a world first, the lawsuit demands that developers perform a recovery fork to return funds to all affected users. It maintains that Nano developers were in the wrong for directing users to the BitGrail site, and that they maliciously refused to perform a hard fork to restore user funds. It was an outlandish idea even at the time the incident was first discovered with most of the stolen Nano having been sold and dispersed months before, and by now it's even more impossible.

The actions of Italian authorities suggest that progress is being made in the lawsuit against BitGrail, and that affected users might have the most luck joining the actions there rather than pursuing a fascinating, but probably ineffectual, court-ordered hard fork.

Disclosure: At the time of writing, the author holds ETH, IOTA, ICX, VET, XLM, BTC and NANO.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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