7 ms·

Crypto.com “accidentally” sent $400M worth of ETH to a wrong address

34 points by janmo 4y ago

cowtools 4y ago
that's awesome. I don't know what I would do if I received that much cryptocurrency- probably launder it and give it to charity.
- Salgat 4y ago
  Unfortunately since it was the address of a known business they've worked with, there's no way they'd be able to get away with keeping that money short of sending it to another address and leaving the country before the FBI can stop them.
  - MiddleEndian 4y ago
    Personally, I think crypto should be: live by the sword, die by the sword. The agreement is the code is law, so the code should be law.
    - charcircuit 4y ago
      Legal code is also code.
      - intrasight 4y ago
        Wow. Five words put paid to all the crypto BS.
    - koolba 4y ago
      If you don’t return $400M of anything you’d have to factor in the risk of a hybrid model of live by the code, die by the sword.
      - throwoutway 4y ago
        $400M can buy some protection
  - mdni007 4y ago
    Even as a business, am I legally required to return crypto that was given to me?
jonathan-adly 4y ago
At this point, people who leave their stuff at exchanges deserve to lose it. Like, what else can drives the not your keys, not your coins mantra. CEXs are either greedy, or incompetent. Either way your “money” is not safe. Of course, managing your own keys and being your own bank is work and comes with risks. It’s not for everyone. So, if you can’t or don’t want to do it. Then, perhaps Crypto is not for you.
- doorman2 4y ago
  Fees are cheaper on centralized exchanges. Like with everything else in crypto, transaction fees kneecap most of the cool stuff.
  - listenallyall 4y ago
    Isn't that a pretty lame excuse? In exchange for saving a few dollars, you're going to hand over the keys to your entire account -- or possibly your entire net worth -- to an unknown, unregulated, unaccountable corporation?
    - doorman2 4y ago
      It's not an excuse, just an economic reality. People prescribe value to things. The value of a typical transaction at a centralized exchange isn't worth the on-chain transaction cost. That's a problem with current blockchains, not a problem with the purchaser.
      - anonym29 4y ago
        I can send thousands of dollars (with a 'priority' fee schedule) for less than a dollar in fees over the plain 'ol regular BTC network. It may be an economic reality, but it's a negligible one.
      - listenallyall 4y ago
        > That's a problem with current blockchains So another "crypto fixes that" that really, it doesn't fix
mdaniel 4y ago
I went to read the web3isgoinggreat.com write-up for this, but didn't see the article on the front page, so I searched for crypto.com and was reminded of this from Aug 2022: https://web3isgoinggreat.com/?id=cryptocom-wants-back-the-7-2-million-they-accidentally-sent-a-customer-last-year https://web3isgoinggreat.com/?id=cryptocom-wants-back-the-7-...
- tedunangst 4y ago
  That's funny, but you should definitely consult a lawyer on the finders keepers rules in your local jurisdiction before spending a bank error windfall.
  - mdaniel 4y ago
    > a bank error windfall. I believe the correct "web3" retort is "code is law" :-D But in all seriousness, this is the debate I see going back and forth a lot around crypto: proponents say it allows getting out from underneath the thumb of "the man," others argue that a phone call to undo a mistake is an advantage of a human and lawyer-centric financial system
    - arlcode 4y ago
      As you correctly write some crypto people really believe that. In reality you now have two regimes: The code and the traditional financial/legal system. If there is a conflict the later will win (with all it's advantages and disadvantages)
      - anonym29 4y ago
        The latter's clearance rate for murders hovers a bit below 55% in the richest country on the planet. I wouldn't rely on any system that achieves a success rate in the vicinity of a coin flip for the most important challenges, and I certainly wouldn't count on it solving smaller, less significant issues with any reliability.
chidog12 4y ago
Traditional Finance solved this problem hundreds of years ago...
- charcircuit 4y ago
  How? People send money to the wrong account all of the time in traditional finance. It is not a solved problem.
  - aYsY4dDQ2NrcNzA 4y ago
    They can almost always claw it back.
    - berberous 4y ago
      Yes, but not always: https://www.cnn.com/2021/02/16/business/citibank-revlon-lawsuit-ruling https://www.cnn.com/2021/02/16/business/citibank-revlon-laws...
      - bombcar 4y ago
        But always: https://www.reuters.com/markets/us/citigroup-wins-appeal-over-mistaken-revlon-wire-transfer-2022-09-08/ https://www.reuters.com/markets/us/citigroup-wins-appeal-ove...
      - jefftk 4y ago
        Citibank won on appeal: https://www.reuters.com/markets/us/citigroup-wins-appeal-over-mistaken-revlon-wire-transfer-2022-09-08/ https://www.reuters.com/markets/us/citigroup-wins-appeal-ove... Citigroup Inc is entitled to recoup about $500 million of its own money that it accidentally wired Revlon Inc lenders three years early, a U.S. appeals court said on Thursday. Reversing a lower court ruling, the 2nd U.S. Circuit Court of Appeals in Manhattan said it was improper to give the lenders a "huge windfall" by letting them keep Citigroup's money, and that they had been on notice the wiring was a mistake.
  - listenallyall 4y ago
endisneigh 4y ago
If exchanges can and do "reverse" transactions, what's the point of crypto? Legal use-cases only. Honestly curious. Each time I ask people talk about how they're from some country and need to send money to their grandma in some other country and their government won't let them, nor will their traditional services, etc. etc. Fair enough, but you're technically just circumventing the government and its laws there. I'm more curious about a situation where it's totally legal in every respect and crypto is better.
- bpodgursky 4y ago
  If it had accidentally been sent to some unknown guy in Kazakhstan, the money is gone. Here it was sent to a known address tied to a legal entity, and the law does not allow for keeping accidental deposits ... it wasn't "reversed", it was voluntarily sent back.
  - endisneigh 4y ago
    Sure, but that's tangential to my point as Crypto.com would've been bound by the law either way, no?
- anonym29 4y ago
  https://fred.stlouisfed.org/series/CURRCIR https://fred.stlouisfed.org/series/CURRCIR
kayson 4y ago
Why didn't they send all of it back...?
- janmo 4y ago
  Coming up: once the funds were on Gate they also accidentally traded them and lost 35k ETH doing so.
ezzaf 4y ago
Crypto.com claim the entire amount was returned: "All funds were returned. We have single digit USD million balance on Gate as of now." https://twitter.com/kris/status/1591610511246102528 https://twitter.com/kris/status/1591610511246102528
- conorcleary 4y ago
  Ctrl-Z
- janmo 4y ago
  Onchain data shows that only 285K of the transferred $320k was returned (a week later), suggesting they might actually have been trading those funds on Gate and took a loss.
  - 22c 4y ago
    The price of ETH fluctuates, eg. 260 ETH today is probably worth a different amount of USD than it was a week ago. It's probably better for clarity if the discussion is had in terms of ETH transferred, not USD value of ETH transferred.
    - jakopo87 4y ago
      320k ETH were sent out and 285k ETH came back, not dollars.

34 points by janmo 4y ago

that's awesome. I don't know what I would do if I received that much cryptocurrency- probably launder it and give it to charity.

Salgat 4y ago
Unfortunately since it was the address of a known business they've worked with, there's no way they'd be able to get away with keeping that money short of sending it to another address and leaving the country before the FBI can stop them.
- MiddleEndian 4y ago
  Personally, I think crypto should be: live by the sword, die by the sword. The agreement is the code is law, so the code should be law.
  - charcircuit 4y ago
    Legal code is also code.
    - intrasight 4y ago
      Wow. Five words put paid to all the crypto BS.
  - koolba 4y ago
    If you don’t return $400M of anything you’d have to factor in the risk of a hybrid model of live by the code, die by the sword.
    - throwoutway 4y ago
      $400M can buy some protection
- mdni007 4y ago
  Even as a business, am I legally required to return crypto that was given to me?

jonathan-adly 4y ago

At this point, people who leave their stuff at exchanges deserve to lose it. Like, what else can drives the not your keys, not your coins mantra. CEXs are either greedy, or incompetent. Either way your “money” is not safe. Of course, managing your own keys and being your own bank is work and comes with risks. It’s not for everyone. So, if you can’t or don’t want to do it. Then, perhaps Crypto is not for you.

doorman2 4y ago
Fees are cheaper on centralized exchanges. Like with everything else in crypto, transaction fees kneecap most of the cool stuff.
- listenallyall 4y ago
  Isn't that a pretty lame excuse? In exchange for saving a few dollars, you're going to hand over the keys to your entire account -- or possibly your entire net worth -- to an unknown, unregulated, unaccountable corporation?
  - doorman2 4y ago
    It's not an excuse, just an economic reality. People prescribe value to things. The value of a typical transaction at a centralized exchange isn't worth the on-chain transaction cost. That's a problem with current blockchains, not a problem with the purchaser.
    - anonym29 4y ago
      I can send thousands of dollars (with a 'priority' fee schedule) for less than a dollar in fees over the plain 'ol regular BTC network. It may be an economic reality, but it's a negligible one.
    - listenallyall 4y ago
      > That's a problem with current blockchains So another "crypto fixes that" that really, it doesn't fix

mdaniel 4y ago

I went to read the web3isgoinggreat.com write-up for this, but didn't see the article on the front page, so I searched for crypto.com and was reminded of this from Aug 2022: https://web3isgoinggreat.com/?id=cryptocom-wants-back-the-7-2-million-they-accidentally-sent-a-customer-last-year https://web3isgoinggreat.com/?id=cryptocom-wants-back-the-7-...

tedunangst 4y ago
That's funny, but you should definitely consult a lawyer on the finders keepers rules in your local jurisdiction before spending a bank error windfall.
- mdaniel 4y ago
  > a bank error windfall. I believe the correct "web3" retort is "code is law" :-D But in all seriousness, this is the debate I see going back and forth a lot around crypto: proponents say it allows getting out from underneath the thumb of "the man," others argue that a phone call to undo a mistake is an advantage of a human and lawyer-centric financial system
  - arlcode 4y ago
    As you correctly write some crypto people really believe that. In reality you now have two regimes: The code and the traditional financial/legal system. If there is a conflict the later will win (with all it's advantages and disadvantages)
    - anonym29 4y ago
      The latter's clearance rate for murders hovers a bit below 55% in the richest country on the planet. I wouldn't rely on any system that achieves a success rate in the vicinity of a coin flip for the most important challenges, and I certainly wouldn't count on it solving smaller, less significant issues with any reliability.

chidog12 4y ago

Traditional Finance solved this problem hundreds of years ago...

charcircuit 4y ago
How? People send money to the wrong account all of the time in traditional finance. It is not a solved problem.
- aYsY4dDQ2NrcNzA 4y ago
  They can almost always claw it back.
  - berberous 4y ago
    Yes, but not always: https://www.cnn.com/2021/02/16/business/citibank-revlon-lawsuit-ruling https://www.cnn.com/2021/02/16/business/citibank-revlon-laws...
    - bombcar 4y ago
      But always: https://www.reuters.com/markets/us/citigroup-wins-appeal-over-mistaken-revlon-wire-transfer-2022-09-08/ https://www.reuters.com/markets/us/citigroup-wins-appeal-ove...
    - jefftk 4y ago
      Citibank won on appeal: https://www.reuters.com/markets/us/citigroup-wins-appeal-over-mistaken-revlon-wire-transfer-2022-09-08/ https://www.reuters.com/markets/us/citigroup-wins-appeal-ove... Citigroup Inc is entitled to recoup about $500 million of its own money that it accidentally wired Revlon Inc lenders three years early, a U.S. appeals court said on Thursday. Reversing a lower court ruling, the 2nd U.S. Circuit Court of Appeals in Manhattan said it was improper to give the lenders a "huge windfall" by letting them keep Citigroup's money, and that they had been on notice the wiring was a mistake.
- listenallyall 4y ago

endisneigh 4y ago

If exchanges can and do "reverse" transactions, what's the point of crypto? Legal use-cases only. Honestly curious. Each time I ask people talk about how they're from some country and need to send money to their grandma in some other country and their government won't let them, nor will their traditional services, etc. etc. Fair enough, but you're technically just circumventing the government and its laws there. I'm more curious about a situation where it's totally legal in every respect and crypto is better.

bpodgursky 4y ago
If it had accidentally been sent to some unknown guy in Kazakhstan, the money is gone. Here it was sent to a known address tied to a legal entity, and the law does not allow for keeping accidental deposits ... it wasn't "reversed", it was voluntarily sent back.
- endisneigh 4y ago
  Sure, but that's tangential to my point as Crypto.com would've been bound by the law either way, no?
anonym29 4y ago
https://fred.stlouisfed.org/series/CURRCIR https://fred.stlouisfed.org/series/CURRCIR

kayson 4y ago

Why didn't they send all of it back...?

janmo 4y ago
Coming up: once the funds were on Gate they also accidentally traded them and lost 35k ETH doing so.

ezzaf 4y ago

Crypto.com claim the entire amount was returned: "All funds were returned. We have single digit USD million balance on Gate as of now." https://twitter.com/kris/status/1591610511246102528 https://twitter.com/kris/status/1591610511246102528

conorcleary 4y ago
Ctrl-Z
janmo 4y ago
Onchain data shows that only 285K of the transferred $320k was returned (a week later), suggesting they might actually have been trading those funds on Gate and took a loss.
- 22c 4y ago
  The price of ETH fluctuates, eg. 260 ETH today is probably worth a different amount of USD than it was a week ago. It's probably better for clarity if the discussion is had in terms of ETH transferred, not USD value of ETH transferred.
  - jakopo87 4y ago
    320k ETH were sent out and 285k ETH came back, not dollars.