The owner of BitGrail made a sudden change to their terms of service today, restricting the website to only customers inside the EU. Accounts now have to be ID verified before they can use the service. @Bomberfrancy, the BitGrail owner, has stated that the many non-EU users who are currently using the service will have two weeks to withdraw their cryptocurrencies before their accounts are closed. This would be an acceptable solution, except the bizarre condition was added that unverified accounts could only withdraw BTC, not any of the other cryptocurrencies offered on BitGrail – namely RaiBlocks.
Suddenly restricting unverified accounts to only BTC withdrawals caused huge amounts of panic as many users were holding significant quantities of XRB. BitGrail became massively popular in recent months due to it being one of the earliest exchanges to offer RaiBlocks, a cryptocurrency that was rapidly gaining popularity at the time. Due to this, it is likely that the majority of BitGrail users signed up only to buy XRB, and many of them likely still had XRB on their account. This is reflected in BitGrail’s 24 hour trade volumes, where the volume of RaiBlocks is magnitudes higher than any other cryptocurrency on the platform.
After the news was released, non-EU users rushed to sell their XRB so that they could withdraw BTC before their accounts were closed. During this time, the price of XRB fell from around $16 to $9.5, meaning that people could have lost up to 40% of the portfolio value they had only a few hours prior. During this massive sell-off, around 1.3 million XRB were traded – a 20x increase over the normal trading volume.
The average sell price during the dip was about $12, meaning that users lost around $4 per XRB sold – a total loss of at least $5.2 million. To add insult to injury, the withdrawal fee for Bitcoin was raised from 0.001 to 0.002 BTC at the same time this change was announced. This increase seems to be blatant extortion though, as the average Bitcoin transaction fee has been dropping since December, and is currently below 0.001 BTC. RaiBlocks would have had no withdrawal fees.
It should also be noted that this announcement coincidentally came while Binance is working on adding RaiBlocks to their platform, a move which could see the value of XRB increase dramatically. There are rumours that this change by BitGrail was orchestrated to allow the owner to purchase huge amounts of XRB at a discount, which they could then sell later on Binance for a massive profit.
10 hours after the initial announcement and huge sell-off, the BitGrail owner made another statement saying that non-EU users who verify their accounts would be able to withdraw cryptocurrencies besides Bitcoin. At this point though, it was much too late. Many non-EU users had already read the announcement and sold everything so that they could withdraw Bitcoin before their account was closed.
Be careful when complaining about the situation online though, as @bomberfrancy has stated that he is prepared to take legal action against anyone defaming his company.
Many users on Reddit have stated that they’ve already been waiting over a month to be verified. It is unclear whether BitGrail will extend the two week deadline to compensate for verification delays, or if their accounts will be shut down while waiting.
This situation just enforces the fact that you shouldn’t leave your cryptocurrencies on exchanges; learn how to make a paper wallet or store your cryptos in a hardware wallet to protect them. Additionally, maybe we shouldn’t use the exchange of someone whose Twitter bio reads “Either you die a programmer, or you live long enough to become a scammer”.
