Facepalm: What would you do if you suddenly found a deposit of millions of dollars in cryptocurrency in your account? A crypto customer in Australia recently faced this moral dilemma and decided to take the money and run. Now the exchange that made the error is trying to do everything possible to erase its mistake and get its funds back. But the person has already spent over $1 million on friends and family.
Crypto.com is kicking itself for a highly foolish clerical error. The cryptocurrency exchange recently issued a refund for a customer in Australia. The transaction was supposed to be for $100 AU ($68.55 US). However, the employee processing the refund entered an account number in the payment field resulting in a $10.5 million AU ($7.2 million US) payout.
To make matters worse, Crypto.com didn't even notice the error for over seven months. It only caught the May 2021 transaction when running an audit in December 2021. By then, the customer had already spent $1.3 million AU ($891,000 US) buying a house for her sister.
CoinTelegraph notes that Crypto.com filed a lawsuit to recoup the funds and received a default judgment from the Victoria Supreme Court. Default judgments are usually issued when a defendant does not appear for the hearing.
Indeed, The Guardian reports the defendant never responded to any communications from Crypto.com's legal team or to the summons. So the court ruled that the customer had to sell the property and return all $10.5 million to the exchange plus interest, equaling $27,369.64 AU ($18762.44 US) and all court costs.
In the meantime, Crypto.com filed a motion to freeze the customer's account to prevent further withdrawals. However, the defendant had moved most of the money to other banks. The court granted a hold on those and the initial account that received the funds.
Other than that, there is not much else Crypto.com can do. Even if all the funds were still in the original deposit account, crypto transactions are not the same as traditional banks. It cannot just reverse the deposit without the cooperation of the wallet holder.
However, the defendant could face other legal ramifications for not returning the money, including fines and jail time for contempt of court. The case will resume in October, but it's doubtful the customer will appear since, up to this point, she has made little effort to comply. The Guardian notes that the defendant is "seeking legal advice."