Nano & Team Faces Class Action Lawsuit, Appeal For A Recovery Fork  

A class action lawsuit has been filed against the Nano and its core team by a US law firm in behalf of the investors that alleges Nano of violating the federal security laws for unregistered selling of securities and leading investors to the exchange, BitGrail which suffered a hacking attack to lose million of XRB ( nano cryptocurrency  ) in February 2018.

Federal security law violation and misrepresentation of BitGrail reliability

A cryptocurrency investor law firm in the USA has filed a class action lawsuit against Nano (previously known as RaiBlocks (XRB) on behalf of Nano investors in the United States District Court, Eastern District of New York.

According to the class action lawsuit, which is filed by a US individual Alex Brola through Silver Miller law firm, Nano cryptocurrency and its development team have violated the federal security laws and misrepresented the reliability of BitGrail, a cryptocurrency exchange. The exchange suffered a hack in mid-February, resulting in the loss of 17 million Nano.

It has been alleged that in order to market XRB to a wide range of investors, Nano and the team made investors open their accounts and further place their assets in the distressed exchange, BitGrail.

Also, read: UK’s Financial Conduct Authority (FCA) Issues Guidelines For Crypto Derivatives

The BitGrail exchange’s hack fiasco

In February 2018, the BitGrail suffered the attack and lost a massive amount of funds, in its response, Nano team tried to clear their name by saying that the owner of the exchange, Francesco has contacted the law enforcement as stated here:  

“From our own preliminary investigation, no double spending was detected on the ledger and we have no reason to believe the loss was due to an issue in the Nano protocol. The problems appear to be related to BitGrail’s software.”

The Nano team further said that Firano wanted the team to modify the ledgers to cover his losses but it wasn’t possible and declared:

“BitGrail is an independent business and Nano is not responsible for the way Firano or BitGrail conduct their business. We have no visibility into the BitGrail organization, nor do we have control over how they operate. We now have sufficient reason to believe that Firano has been misleading the Nano Core Team and the community regarding the solvency of the BitGrail exchange for a significant period of time.”

The Nano team has yet to give any official statement regarding the charges filed against them.

Nano cryptocurrency rescue fork: Is it really a possibility?

The most integral part of this lawsuit by the plaintiff, Alex Brola is the complaint that Nano and its core team is engaged in the unregistered offering and sale of securities. This in result violates the federal security laws covering the Section 5, 12 (a) and 15 of the Securities Act of 1933. It has also been alleged that the Nano and its team wrongly pushed the investors towards BitGrail.

The plaintiff, Alex Brola has reportedly bought $50,000 worth of Nano in December 2017. The complaint claims that apart from the plaintiff, there are at least hundreds of “putative class members” that the law firm will be contacting during the discovery period.

The lawsuit pleads the court to order Nano to “rescue fork” so that the investors that have lost the Nano tokens can be compensated fairly with a new Nano cryptocurrency.

Do you think the plaintiff has a chance of getting the favourable outcome in this situation?