crypto transfere accident

Crypto.com accidentally transfers $10.5 million in cryptocurrencies to a user

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Far from being the only cryptocurrency company to cause a scandal this year, Crypto.com is making mistakes by accidentally transferring nearly $10.5 million (in cryptocurrency) to an individual in Melbourne in May 2021. of the story, the company didn’t realize the error until seven months later and is now suing the person in question to recover the sum — even though the latter has already moved the money to other accounts and spent part. Note that this is not a first for the company in terms of serious errors: in January of this year, Crypto.com suffered a loss of $ 34.5 million in cryptocurrencies following a hack. Which seems ironic for a supposedly foolproof transaction system.

The cryptocurrency market has not been spared by the global economic crisis. After the catastrophic collapse of the market, the companies dedicated to it had to resort to mass layoffs, amounting to up to 20% of the payroll. In addition to inflation, these companies are victims (and this does not improve over time) of hacks and accumulate errors internally concerning transfers.

Thevamanogari Manivel, a Melbourne resident woman, received $10.5 million from Crypto.com despite only asking for a $100 refund. Upon receiving the sum, she used nearly $1.5 million to buy a huge property in Craigieburn in Melbourne’s north in February. The titles to the mansion were later transferred to the name of his sister, Thilagavathy Gangadory, who lives in Malaysia. The rest of the money was transferred to a joint account and that of his children.

The woman in question had plenty of time to place the money, as Crypto.com would not have noticed the error until seven months later, which seems unlikely for a company employing the best IT people for crypto transactions. According to the judge of the Supreme Court of Victoria in charge of the lawsuit, it is extraordinary that the plaintiffs (Crypto.com) did not notice such an error until December 2021.

However, by filing a complaint, the company obtained a freeze on Manivel’s account at the Commonwealth Bank in Australia, other accounts to which she transferred part of the money, and her assets, except that of her sister in Malaysia. . The court then ordered the latter to sell the property as soon as possible and to add an amount of interest of 27,369 dollars (plus ancillary costs).

A society that follows error upon error

It may seem strange that cryptocurrency companies can make this kind of mistake and many other equally clumsy ones. A flaw that makes them more vulnerable is probably on the “decentralized” side, as platforms are often unregulated. When a company is robbed, it is then difficult for them to recover their money.

Just recently, Crypto.com had thousands of Ethereum (4836.26 ETH) and hundreds of bitcoins (443.93 BTC) hacked and stolen, along with around $66,200 of other cryptocurrencies, which equates to a total amount of approximately $34.5 million. The event begins on January 17 this year, when nearly 500 users reported disturbing movements on the platform. Site management teams then immediately suspended withdrawals, a downtime that lasted 14 hours.

A company of the stature of Crypto.com should not normally suffer such hacks, as a regulated platform (even a decentralized one) is logically designed to be almost infallible in terms of security. Yet transactions that weren’t supposed to happen were approved by the authentication system, without the approved users typing anything.

To fix the problem, the company had to establish an additional security firewall to add a mandatory 24-hour delay between registering a new withdrawal address and the previous withdrawal. Users receive notifications each time a new address is registered.

However, these security measures are not really useful if the errors are made by the teams of the company themselves. Ultimately, cryptocurrency systems are not as secure as previously thought. Regarding the Manivel case, the trial will resume in October.

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