In the United States, a class action lawsuit was filed in the District Court of the Eastern District of New York by Nano Investors (XRB, formerly Raiblocks). The plaintiff, like Exchange BitGrail, is demanding a hard fork from the Nano Core team to compensate the investors. The consequences of such a judgement are not foreseeable for Nano and the crypto economy.
Nano, formerly RaiBlocks, is a blockchain-based system in which individual wallet hosts own their own blockchain. The individual blockchains of the users are compared with each other via a blockchain lattice. According to the team behind Nano, the scaling problem will be solved and free transactions will be possible. BTC-ECHO presented the system in more detail some time ago.
Demanding a hard fork to save the money
With this lawsuit one wants to enforce a kind of “rescue fork” into a new crypto currency by the Nano-Core team in order to compensate the investors. BitGrail operator Francesco “The Bomber” Firano revealed the theft on 09.02.2018. Subsequently, there was a conflict with the nano developers over the question of whether the blockchain should be adapted afterwards to the advantage of the investors. Nano then accused Firano on the official blog of wanting to mislead the developer team and the community.
Silver Miller will contact numerous other alleged co-plaintiffs during the investigation phase. The firm sees itself as a strong defender of crypto fraud. The firm is currently involved in various legal disputes against large crypto exchanges such as Coinbase and Kraken as well as ICO promoters such as Monkey Capital and Tezos. In addition, the firm advertises with a fee on a success basis: This is therefore only due if the plaintiff receives compensation in full or at least in part.
Rescue of investors or attack on decentralization?
Due to the loss of possibly several hundred euros, it is understandable that investors are now reacting emotionally. There is, however, to consider, with which carelessness the affected persons want to put the decentralization of a blockchain-based web system into the centralized hands of the judiciary. It is therefore questionable whether the philosophy of a decentralised blockchain can be justified. There is a danger that such a precedent will emerge with which one wants to control decentralized systems.
In mid-February 2018, 17 million nano (then worth 160 million euros) were stolen from the crypto exchange. The BitGrail team then requested a hard fork from the Nano Development team to undo this theft, which the team behind Nano rejected. This Hard Fork was not simply rejected, but was considered impossible from the developer’s point of view.
This classification, however, does not seem to be shared by all. By Alex Brola as the named plaintiff, represented by the law firm Silver Miller, a lawsuit was filed. Brola bought on 10.12.2017 Nano worth 50,000 US dollars. He is not suing against the Italian Exchange BitGrail itself, but against the Nano-Core team. The lawsuit alleges the improper sale of unregistered securities and the fact that Exchange has been negligently failed to provide reliability.
Whatever side of this debate you may be on, the whole BitGrail case is one of many examples that show that you should not keep large sums on an exchange. These should be transferred to wallets where you have the power over the private key.