On October 22, a New York judge dismissed a proposed class-action lawsuit filed against the Nano XRB’s development team by an investor. The plaintiff which is an American named Alex Brola originally filed a lawsuit against the development team in April after BitGrail lost over $182 million worth of XRB.
The plaintiff claimed that he acquired $50,000 worth of XRB in December after the development team had lured him to invest in XRB. According to the court document filed on Monday, Brola claimed that Nano’s core team was instrumental in the mass purchase of the Nano coin ahead of BitGrail’s security breach. Therefore, the plaintiff accused the team of negligently luring investors to buy coins on BitGrail without assessing the reliability of the platform. Further, Brola accused the team of violating securities laws in the US when it sold securities (XRB} without a license.
Brola Asked Nano to Recover Stolen Coins
As such, Brola asked the court to order Nano to “rescue fork” the stolen XRB which will serve as a compensation for victims of BitGrails hack in February. Interestingly, Brola is the only named plaintiff in the filed lawsuit. However, his representative, Silver Miller law firm claimed that it would contact hundreds or thousands of other affected investors.
In September, the XRB team filed a motion which asked the court to dismiss the lawsuit. The team argued that the XRB tokens are not classified as securities, therefore, US securities laws do not apply to them. In particular, the team explained that the startup did not make any money from the insurance of the coins or issuing the coins to investors. According to the document:
“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,”
Surprisingly, Brola voluntary withdrew the lawsuit last month before US district judge Nina Gershon eventually dismissed it on Monday. Although court documents do not reveal the reason for Brola’s voluntary withdrawal, news outlet, Law 360 claimed that the lead defense counsel stated that:
“The plaintiff withdrew the complaint because the case lacked merit.”
BitGrail Vs the Nano Team: The Blame Game
In February, hackers stole 7 million XRB worth $182 million from BitGrail. Following the hack, neither Nano’s development team nor BitGrail accepted to take responsibility for the security breach. BitGrail claimed that the development team was to blame as XRB had security loopholes that the hackers capitalized on. As expected, Nano’s core team retaliated by questioning BIitgrail’s integrity and business model. A week after the hack, BitGrail’s CEO Francesco Firano stated that “it’s impossible to refund the stolen amount.”