NANO Developers Cleared in Lawsuit over BitGrail Hack
NANO (NANO)–NANO, the cryptocurrency formerly known as Raiblocks XRB, has had one of the more historically bad trajectories of the 2018 bear cycle. While the coin experienced a meteoric rise in valuation to close out 2017, one that saw the price of the coin climb from under a dollar to nearly $36 in the span of a month, the aftermath was equally catastrophic.
NANO pricing has continued to decline from hitting an all time high at the beginning of the year, at one point dipping below the one dollar mark to constitute a 98 percent loss in value. However, much the downward price movement has been related to conditions out of the control of both the development team behind the coin and the general enthusiast base for the currency. In addition to being swept up in the hype of the cryptocurrency boom to round out 2017 and kickoff the first few weeks of this year, NANO’s meteoric rise created the toxic, bloated investment conditions that made the coin ripe for such a precipitous fall. Unexpectedly, the coin also went through one of the most severe and high-profile hacks of the 2018 fiscal year. While cryptocurrency thefts and exchange compromises have become a dime a dozen over the years, BitGrail’s hack of $187 million worth of NANO (at the time still trading under Raiblocks XRB) became a bizarre affair of accusations and finger pointing. Ultimately, investors in NANO became the real losers in the aftermath of the hack, with millions of dollars worth of stolen coinage directly impacting the wallets of those affected while introducing massive uncertainty around the currency to drive prices lower.
At the time, exchange founder Francesco Firano blamed the NANO development team for security issues in the coin that allowed for the hack to occur. Unsurprisingly, the NANO team retaliated with their own accusations against Firano and the integrity of the BitGrail exchange and user funds. Neither side was able to come to agreement, and eventually the lawsuit was taken to court in a process that would further taint the brand.
However, NANO also faced a lawsuit by a particular American named Alex Brola, over the role the development team played in inducing investors to buy into the NANO coin ahead of the massive exchange hack. According to court documents filed on Oct. 22, Brola accused NANO devs of prompting him to buy into the coin on the soon to be compromised exchange BitGrail, in addition to claiming that the team was breaching U.S. securities laws by selling unregistered securities.
Similar to the narrative pushed by some NANO investors following the BItGrail hack, Brola pleaded for NANO devs to create a recovery fork that would return affected users their coins, thereby providing some compensation for the victims who lost tens of millions in total. Rather than allowing the case to proceed to trial, U.S. district Judge Nina Gershon dismissed the case (in conjunction to what is being reported as a withdrawal of the complaint by the plaintiff), preventing the NANO development team from being held liable.
The NANO team filed a motion in September claiming that their cryptocurrency could not be classified as a security because the company did not directly profit from insuring the coin or selling directly to investors. In the motion, the team said,
“Nano’s value does not derive from a group of managers or executives managing other people’s property; rather, Nano’s value is derived from its utility or potential utility as a currency,”