Imagine checking your crypto account and finding millions of dollars you weren’t expecting. Sounds like a dream, right? Well, for one Melbourne couple, it quickly turned into a legal nightmare. They accidentally received a whopping 10.5 million Australian dollars (that’s about $6.7 million USD!) from the popular cryptocurrency exchange, Crypto.com. But instead of reporting the error, they went on a spending spree. Let’s dive into this bizarre tale of digital dollars gone astray.
How Did a $100 Refund Turn into Millions?
The story begins in May 2021 with a seemingly routine transaction. Thevamanogari Manivel attempted to get a refund of just AUD $100 (a mere $67 USD) after a transfer to her partner Jatinder Singh’s Crypto.com account had an issue. The system correctly identified that the bank account details didn’t match the exchange account and initiated a refund. So far, so good, right?
Here’s where things went spectacularly wrong. Instead of processing a $100 refund, Crypto.com accidentally transferred a staggering AUD $10.5 million to the couple. Yes, you read that correctly – millions! This monumental blunder went unnoticed for a staggering seven months, only coming to light during Crypto.com’s annual audit in December 2021.
Let’s break down the timeline:
- May 2021: The initial $100 refund request and the accidental $10.5 million transfer.
- May – December 2021: The couple allegedly spends the millions without alerting Crypto.com.
- December 2021: Crypto.com discovers the error during an audit.
From Refund to Riches: What Did They Buy?
Upon realizing the colossal mistake, Crypto.com understandably took legal action, filing a lawsuit in the Victoria Supreme Court to reclaim their funds. But by then, the money was largely gone. According to reports, the couple had already splashed out on:
- Multiple Properties: They allegedly purchased four houses!
- Luxury Vehicles: Cars were also on the shopping list.
- Other Goods: Various unspecified items were bought.
- Overseas Transfer: A significant chunk, around AU$4 million, was reportedly sent to a bank account in Malaysia.
The court acted swiftly, ordering the sale of one of the properties – a five-bedroom house in Craigieburn valued at AU$1.35 million – to recover some of the funds.
“We Thought We Won a Prize!” – The Couple’s Defense
In an attempt to explain their actions during court proceedings in October 2022, the couple offered a rather unusual defense: they claimed they believed they had won a prize from Crypto.com. Jatinder Singh stated he remembered receiving notifications about a company competition.
However, Michi Chan Fores, Crypto.com’s compliance officer, firmly denied any such competition or prize notifications. This defense seemed to hold little water, especially considering the sheer amount of money involved and the nature of the initial transaction – a refund, not a lottery entry.
Legal Fallout: Guilty Plea and Plea Trial Ahead
The legal repercussions have been unfolding. In September 2023, Thevamanogari Manivel pleaded guilty to recklessly dealing with the proceeds of crime. She received an 18-month community corrections order, including intensive compliance and unpaid community work for six months.
Meanwhile, Jatinder Singh is set to face a plea trial on October 23rd. He will have the opportunity to present his defense and argue his case. The outcome of his trial remains to be seen.
Not Crypto.com’s First Slip-Up
Interestingly, this isn’t the first time Crypto.com has made headlines for significant transaction errors. In October of last year, they accidentally sent a massive 320,000 ETH (worth around $400 million at the time) to an address linked to the exchange Gate.io.
Crypto.com CEO Kris Marszalek clarified that this particular incident was meant to be an internal transfer to a new cold storage address but was mistakenly sent to a whitelisted external exchange address. Fortunately, in that instance, the funds were recovered.
“We worked with the Gate team and the funds were subsequently returned to our cold storage. New process and features were implemented to prevent this from reoccurring.” – Kris Marszalek, CEO Crypto.com
The exchange has also faced scrutiny regarding potential conflicts of interest with its internal trading teams.
Key Takeaways and Lessons Learned
This bizarre case highlights several important points:
- The Human Element in Crypto: Despite the advanced technology, human error remains a significant risk in cryptocurrency transactions.
- Importance of Audits: Regular audits are crucial for identifying and rectifying errors, even if it takes months.
- Responsibility of Users: While Crypto.com made a massive mistake, the couple’s decision to spend the money knowing it wasn’t theirs raises ethical and legal questions. “Finders keepers” doesn’t apply to millions accidentally deposited into your account!
- Security and Process Improvements: Crypto exchanges need robust systems and processes to prevent such errors from happening in the first place. Crypto.com has stated they’ve implemented new features to avoid recurrence.
The Verdict?
The case of the Melbourne couple and the misplaced millions serves as a cautionary tale in the fast-paced world of cryptocurrency. It underscores the need for vigilance, robust security measures, and a strong dose of common sense on both the exchange and user sides. As Jatinder Singh prepares for his plea trial, the crypto world will be watching to see the final chapter in this extraordinary saga of digital dollars and real-world consequences.
Disclaimer: The information provided is not trading advice, Bitcoinworld.co.in holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.