Technology
Thursday, September 1st, 2022 1:30 pm EDT
It took seven months for the Matt Damon-endorsed Crypto.com to realize that it accidentally sent AU$10.5 million dollars (about $7.1 million at today’s exchange rate) to a woman in Australia, instead of the 100 Australian dollar refund she requested. Now, the cryptocurrency trading platform is going after Melbourne-based Thevamanogari Manivel and her sister, Thilagavathy Gangadory, to retrieve its money — along with 10% interest and legal fees.
Court documents show that in May 2021 an employee for the Singapore-based trading platform mistakenly entered an account number into the payment amount field. Crypto.com realized it had accidentally sent Manivel millions of dollars in December 2021 when it was conducting a routine audit.
Manivel spent about AU$1.35 million of the accidental windfall on a property, according to the filing.
While cryptocurrency transactions are not reversible, centralized platforms can theoretically reverse payments in cases of fraud or error. But in this instance, the company did not discover the error until seven months later, after some of the money had allegedly been moved or spent. The company convinced authorities to freeze Manivel’s bank account in February, but she had already transferred the money to other defendants named in the case, according to the filing.
The judge ruled in Crypto.com’s favor, and the case returns to court in October where a judge will determine next steps in the case.
The suit comes at a difficult time for the platform. In June, the company laid off 260 employees, or 5% of its workforce, and has reportedly gone through a second round of aggressive cuts, as crypto firms across the board look for ways to cut costs with investors rotating out of the riskiest assets, pulling down trading volumes.
Bitcoin and ether are both down by more than 58% this year, while the wider crypto market has fallen below $1 trillion, down from $3 trillion at its peak in Nov. 2021.
Meanwhile, Crypto.com faces some hefty ongoing payments, including a $700 million, multiyear naming rights deal to the Staples Center in Los Angeles, which is home to the Lakers and WNBA’s Sparks.
“As the matter is before the courts, we are unable to comment,” Crypto.com told CNBC in an email.
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