Crypto.com accidentally sent $10 million to one of its users

The Australian online newspaper Ticker News, told a very curious story today. 

In fact, it reports that a Melbourne woman received $10.5 million from Crypto.com by mistake. 

The woman had requested a $100 “refund,” but the exchange accidentally sent her $10.5 million. 

The woman who received more than $10 million from Crypto.com

The woman hid the incident from Crypto.com, and it took the exchange more than seven months to notice. The problem occurred in May 2021, while the error was later discovered only just before Christmas thanks to a company audit.

Together with her sister, in fact, the woman with the money she received purchased a mansion in Craigieburn worth several million dollars. By the time the exchange tried to recover the money, it had already been moved and spent.

At this point, the exchange’s attorneys initiated legal action in the Australian Supreme Court against the two sisters to try to recover the money. The court now ordered the sale of the property and the return of the remaining money.

The court during the trial found that the company allegedly accidentally entered the bank account number in the payment field, instead of the $100 amount.

As far as is known, this is a more unique than rare case, both because of the amount and especially because it took seven months to notice. In the end, however, the woman would probably have been better off reporting the problem to the exchange early on, to avoid prosecution and the loss of the proceeds. 

The problem with P2P transactions

In contrast, such errors are not at all uncommon when it comes to direct P2P transactions between individuals, that is, which do not go through a third-party-provided service such as an exchange. 

The fact is that, unlike this affair, which involves well-defined and easily identifiable entities, P2P transactions on the other hand can take place even between unidentifiable parties. What’s more, they are irreversible, so in the case of errors involving P2P transactions for which the recipient is not identifiable, the chances of getting back funds sent erroneously are almost nil. 

Leaning on third-party companies has numerous disadvantages, including, for example, that of losing funds in the event of bankruptcy, but occasionally it also has some advantages, although in this case, it was the company itself that could benefit. 

Finally, it should be noted that the transaction in question was done in dollars, therefore, fiat currency, and not in cryptocurrency, but again it turned out to be irreversible because the money had already been spent when the exchange tried to recover it.