Australian Crypto Exchange Seeks to Recover $328k After Fat-Finger Crediting Error

Australian Crypto Exchange Seeks to Recover $328k After Fat-Finger Crediting Error

An Australian cryptocurrency exchange is grappling with efforts to retrieve approximately $328,000 from a user after a significant fat-finger error led to an erroneous credit to their account.

Rhino Trading, the parent company of the crypto exchange OTCPro, inadvertently transferred $653,000 (995,000 Australian dollars) to a user, vastly surpassing the intended amount of $65,300 (99,500 Australian dollars), as revealed by court documents cited by ABC News.

The exchange realized its mistake on February 4th but has encountered challenges in contacting the user, identified as Kow Seng Chai, to facilitate the return of the funds.

Despite multiple attempts to reach out via email, Chai has not responded to the exchange’s communications regarding the issue. Court filings indicate that Chai allegedly utilized the mistakenly credited funds to purchase Tether and subsequently withdrew approximately $626,700 (956,000 AUD) from the exchange in several transactions, each capped at the daily withdrawal limit of $100,000.

Complicating matters further, Rhino Trading faced difficulties in contacting Chai directly. A phone call to the number associated with his account was answered by an individual who claimed it was not Chai’s number. Additionally, Chai failed to appear in court, prompting the pursuit of further legal action.

In response to the risk of asset disposal, the Supreme Court of Victoria took swift action by freezing Chai’s assets on February 9th. A subsequent injunction issued on February 21st aimed to prevent Chai from leaving the country. Justice Michael Osborne underscored the “real risk of assets being disposed of” during his ruling, emphasizing the gravity of the situation.

The exchange has reported a net loss of nearly $322,700, considering the total erroneously sent funds minus Chai’s remaining account balance.

This incident evokes memories of a similar mistake made by Crypto.com in 2021, where a Melbourne couple received 10.5 million Australian dollars ($6.7 million) due to a clerical error.

Believing they had won a prize from the exchange, the couple spent the funds. However, during legal proceedings, Crypto.com’s compliance officer clarified that no such competition had been communicated to users.

The Melbourne couple faced legal repercussions for their actions, with Thevamanogari Manivel receiving an 18-month community corrections order in September 2023 for recklessly dealing with the proceeds of crime. Jatinder Singh is scheduled for a court hearing in March.

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