Categories: CryptoNews

Securities Class Action Lawsuit Against Nano Developers Demands a Bailout Hard Fork

Most people who keep an eye on cryptocurrency will recall the recent BitGrail hack. Due to that particular incident, the exchange allegedly lost several million dollars’ worth of Nano. There has always been suspicion that something was afoul, although very few people expected this latest turn of events. It appears a securities class action lawsuit has been filed against Nano and its developers.

The Nano Plot Thickens

When the BitGrail exchange was hacked, a lot of people assumed the platform operator simply ran off with the money. To this date, there has been no evidence to support such claims, although it remains a distinct possibility. The owner of the exchange, in turn, blamed the Nano developers for “various flaws” in the project’s code which allowed the theft to happen.

After a lengthy period of silence, a new plot twist has occurred. According to Silver Miller Law, a securities class action lawsuit has been filed against the Nano cryptocurrency and the members of its development team. It’s a very interesting development, as it is the first time someone has tried to take legal action against a legitimate cryptocurrency on this scale.

More specifically, the lawsuit claims the members of the Nano core team violated federal securities law and recklessly directed investors to the BitGrail exchange as a way to store their assets. Even though the exchange itself appeared troubled already, the Nano team seemingly felt it was a good place to trade the currency. At that time, this currency was known as RaiBlocks, which rebranded to Nano a few months ago.

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One aspect of this lawsuit which is pretty worrisome is that Silver Miller Law claims the developers behind Nano issued an unregistered offering and sale of securities. Given the SEC’s recent crackdown on companies pursuing the ICO method to sell unregulated securities, it is very likely that bad things will happen to Nano. That is, assuming these charges stick, as the team will be allowed to defend its position in this matter.

To make matters worse, the BitGrail “theft” of $170 million worth of Nano may not work in favor of this digital asset either. The lawsuit demands the court rescind the plaintiffs’ investments and urges the Nano developers to “rescue fork” the missing XRB into a new cryptocurrency to compensate the victims. A bailout on the scale of what Ethereum’s developers did for victims of the DAO’s incompetence, basically. It’s a very strange demand, albeit one that makes some sense.

How all of this will play out remains to be determined. It is clear that the Nano hack occurred and that funds were stolen. The BitGrail exchange operator clearly has no intention of doing much about the theft, as he is trying to move on by relaunching the platform. Whether or not the Nano developers will hard fork the currency to bail out the victims remains unknown. It certainly makes for an intriguing altcoin story, although not one most people had hoped to see.

JP Buntinx

JP Buntinx is a FinTech and Bitcoin enthusiast living in Belgium. His passion for finance and technology made him one of the world's leading freelance Bitcoin writers, and he aims to achieve the same level of respect in the FinTech sector.

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